Zacks Industry Outlook Highlights: Starwood Hotels and Resorts Worldwide, Marriott International, Wyndham Worldwide and Hyatt Hotels

CHICAGO, Dec. 12, 2012 /PRNewswire/ -- Today, Zacks Equity Research discusses the U.S. Hotels & Lodging, including Starwood Hotels and Resorts Worldwide Inc. (NYSE: HOT), Marriott International Inc. (NYSE: MAR), Wyndham Worldwide Corp. (NYSE: WYN) and Hyatt Hotels Corp. (NYSE: H).

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A synopsis of today's Industry Outlook is presented below. The full article can be read at  

Link: http://zcom.zacks.com/stock/news/88404/hotel-lodging-stock-update-dec-2012

The year 2012 is likely to end on a positive note for the hotel & lodging industry, with lodging performance indicators witnessing considerable improvement in most parts of the world. In the recently concluded third quarter of 2012, most of the sector heavyweights -- Starwood Hotels and Resorts Worldwide Inc. (NYSE: HOT), Marriott International Inc. (NYSE: MAR), Wyndham Worldwide Corp. (NYSE: WYN) and Hyatt Hotels Corp. (NYSE: H) -- surpassed their earnings expectations.

However, global economic and political issues like sovereign debt, currency fluctuation, the U.S. fiscal cliff and sustained economic instability in various countries will continue to affect lodging companies in the first half of 2013.

Notwithstanding the hurdles expected ahead, the lodging sector should continue its recovery into next year. International travel and tourism volumes are anticipated to increase. Both Starwood and Marriott expect corporate rate negotiations which will likely lead to a high-single-digit increase in 2013.

Furthermore, big events in Europe and South America scheduled in 2012 through 2016 are expected to boost tourism. As owners and operators strive to enhance value and competitiveness, industry-best practices like sustainability and brand refreshment will remain priorities in the industry.

Coming to near-term industry dynamics, hoteliers will likely report modest RevPAR (revenue per available room) growth in the fourth quarter backed by the improvement in room rates, strong group performance occurring the week before an early Thanksgiving, partially offset by somewhat lower occupancy growth due to looming political concerns.

According to Smith Travel Research (STR), a leading information and data provider for the lodging industry, hoteliers will end the year with 2.6-2.8% growth in room nights sold with ADR growth over 4.0%.

International Expansion

Owing to the saturation in the U.S. market, major hoteliers have been exploring growth opportunities abroad. Some international markets offer greater potential riding on a stepped-up pace of economic growth. The operating environments in these markets help hoteliers grab a bigger share of the overseas pie.

A number of U.S.-based hoteliers are targeting unsaturated markets of India, Brazil, China, Russia and Africa. Major players in the industry like Starwood and Marriott are primarily eyeing the Asia-Pacific, Africa and Latin American regions.

China is set to fuel a recovery in global tourism, and is expected to emerge as the world's most popular travel destination by 2020. Both Starwood and Marriott generate their second largest revenue stream from China.

India is another hot spot for the western hoteliers. The country possesses a compelling investment proposition and is growing in prominence as a global business hub, where the demand for moderate-tier as well as upscale branded hotels is expected to considerably outpace the supply over the next three to four years.

The prospects for Latin America, particularly Brazil, remain outstanding. Brazil is the largest country in South America and is the fastest-growing travel and tourism economy in Latin America. For tourists, particularly domestic travelers, the region is becoming one of the hottest destinations. Brazil primarily attracts affluent domestic tourists in the flush of an economic resurgence.

Moreover, with major events like the FIFA World Cup in 2014 and the Summer Olympics in 2016, the Brazilian government has turned its focus on improving the country's infrastructure as demand for hotel rooms will shoot up and the events will significantly increase tourism in the country.

According to Jones Lang LaSalle, hotel investment in Brazil will be around $2.4 billion by 2014. The real estate consulting company predicts that a large number of hotels will come up in the country to cash in on the FIFA World Cup and the Olympics. Mexico is also on the path of recovery with the crime situation improving gradually.

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