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Old 05-05-2009, 12:56 PM   Nav to Top  #1
Johnnybaek
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Default Hospitality Industry (BEE, HST, AHT, FCH)

What everyone must understand about the hospitality industry, which is ideally common sense economics, is that it is an economy driven industry.

A quick brief about occupancy and revpar (revenue per average room) in this segment which has dropped the stock prices like a rock. The hospitality industry has been in a recession since the latter part of 2007 with occupancy dropping which would drop revenue but has escalated in 2009 to a Revpar decrease of 20-30% in California (which is a tourism driven lodging) and roughly 16-25% in the top 25 markets year over year (Feb. 2009 vs. Feb 2008).

With Revpar in mind, the hospitality industry has been in a great influx of investors. REITs, who have traditionally purchased apt. buildings and retail centers have seen the value added in hospitality and have increased the prices of hospitality products, such as in the residential market. REIT, once again, traditionally have leveraged little with their purchasing power and have retained a great deal of equity throughout the years. As prices of hotels increase year over year since 2000, developers have gotten into the mix. Purchasing lots of raw or underdeveloped land and have over developed all throughout the nation with nearly tracts of hotels in one general area and are currently cannibalizing the industry as they compete and lower rates at a drastic discount.

This decrease in Revpar in conjunction w/ overdeveloped areas is creating hotel owners to become delinquent in their note repayment. The Marriott in Los Angeles, is currently in BK. The newly developed W in Scottsdale, AZ and San Diego, CA has been taken back by the bank as well as numerous others that have been developed and have not been able to meet their projected income.

Looking at BEE's portfolio, most of those purchases have come before the 2003 which is a great sign that they have equity remaining. This is a great play as evident by the surge in the stock price, but most hotel experts feel that the industry is still in for some hurt. Hotel earnings should be an indicator that Q1 wasn't a horrible quarter for the industry.

Also, although I do not hold a crystal ball, this summer should be a good season as travellers look to stay closer to home and travel within the US. The whole notion that it couldn't have been worse than 2008 Q4.

Last edited by Johnnybaek; 05-06-2009 at 03:03 PM..
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Old 05-08-2009, 05:47 PM   Nav to Top  #2
Solvirser
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Old 03-01-2020, 07:42 AM   Nav to Top  #3
Goblet
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Guys, when you choose a room in a hotel do you take one that satisfies all your needs or try not to spend much money? I just can't imagine spending time in a hotel where I can't spend time in a hot tub. I have one in my detached house and I got used to it a lot. Incidentally, I bought a new cover for it from here. It looks nice and gives enough protection.
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Old 03-14-2020, 04:21 PM   Nav to Top  #4
Kempa
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looks useful
thanks
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