Salient to Investors:

  • Jan Freitag at STR said from May through July, the most hotel room nights were sold since they began tracking the data in 1987, while reservations for Saturday nights, at almost 83% occupancy in July, is an indication of the healthy return of leisure travel. STR predicts revpar will increase 6.9% in 2014 and 5.2% in 2015. Freitag said the limited stock of new rooms in the US until at least 2016 along with rising demand enables hotels to boost prices.
  • AAA said the most Americans since 2008 took trips of 50 miles or more from their homes during the Labor Day weekend.
  • Russell Price at Ameriprise Financial said AAA’s forecasts are consistent with other measures of discretionary spending that also have improved, including new auto sales, while broader hiring has gained along with a higher level of comfort in Americans’ personal financial situations from stock gains. Price said increased leisure-hotel demand is fueled primarily by middle- and upper-income Americans, who are disproportionately helped by the stock market’s positive wealth effect.
  • Bill Crow at Raymond James said consumer travel makes up 30% of total US hotel bookings and economic growth in other countries has been a tremendous benefit to the industry, and hoteliers have been able to raise prices by 4% this year.  Crow does not see a material slowdown from healthy levels this year or next as consumers have been undaunted by geopolitical headlines or other economic challenges.
  • John Hach at TravelClick said bookings for Q3 and Q4 are accelerating, putting 2014 on track to be the strongest year since 2007, while recent gains have been buoyed in part by group travel which had been slow to rebound as the industry recovered from the recession.  Hach cautions that unforeseen events, such as continuing conflicts worldwide, could cause momentum to contract rather quickly. Hach said  tighter supply means hoteliers can be more opportunistic and optimistic than in the past.
  • Most FRB districts are optimistic, with Boston, Richmond and San Francisco seeing strong advance hotel bookings through the fall.

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