CALL TO ACTION
Lodging companies (C-Corps) are set to report earnings this week, starting with HOT on Tuesday (press release only). We think this earnings season will illustrate a deceleration trend. Post-Brexit, hotel stocks have come roaring back, and in our opinion the move is well overdone and largely a function of sector rotation and negative sentiment washout. However, our company RevPAR trackers suggest that most of the hoteliers/REITs will post 2Q RevPAR around the low end of their guidance range and likely lower full year RevPAR expectations. The operators will probably escape with intact 2Q EBITDA and full year EBITDA guidance. However, we think the hotel REITs may be forced to cut EBITDA guidance as well. Stay tuned to management commentary regarding the battle shaping up between the brands and the OTAs – a price war that likely weighs heaviest on the REITs.
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