CHICAGO, Feb. 4, 2011 /PRNewswire/ -- Today, Zacks Equity Research discusses the Hotel Industry, including: include Intercontinental Hotels Group plc (IHG) and Morgans Hotel Group Co. (MHGC). The stock with Zacks #1 Rank (Strong Buy) is 7 Days Group Holdings Ltd. (SVN) and Wyndham (WYN).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
A synopsis of today's Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/47092/Hotels+and+Lodging+Industry+Outlook+-+Feb.+2011
We believe the hotel industry has begun to turn around. We expect this trend of positive demand growth to continue in 2011 and beyond. According to data from Smith Travel Research, the leading information and data provider for the lodging industry, the U.S. hotel industry reported single-digit increases on all three key performance measurements -- occupancy level, ADR and RevPAR -- during the week of January 16-22, 2011.
Comparing the operating metrics with the prior-year period, the industry's occupancy increased 6.5% to 49.8%. As a result, RevPAR rose 9.3% to $47.99. The week ended with a 2.6% rise in RevPar to reach $47.99 at the end of the week. Moreover, supply and demand are likely to have grown 2.2% and 6.6%, respectively, in 2010.
Smith Travel Research projects that the hotel industry will end 2011 with increases in all three key metrics. The expected growth is 1.4% for Occupancy to 57.9%, 3.9% for ADR to $101.55 and 5.3% for RevPar to $58.75. Both supply and demand are projected to rise 1.1% and 2.5%, respectively.
The operating environment in the international market is better, propelling hoteliers to grab bigger shares of the overseas pie. Hotels in the Asia-Pacific region experienced increases on all three key performance metrics for year-end 2010, according to data from Smith Travel Research. The region's Occupancy, ADR and RevPar increased a respective 8.9%, 11.4% and 21.3% to 66.0%, $132.80 and $87.69.
The hoteliers are also focused on rebalancing their portfolios by increasing contributions from managed and franchised hotels. This fee-based business is attractive as growth is powered by multiple sources-RevPAR growth, unit additions and incentive fee escalation. The business is also capital efficient as the owner/developer partners provide the capital and the company then earns a fee by managing/franchising the property.
Currently, there are a number of stocks in the hotel industry universe with a Zacks #2 Rank (Buy). These include Intercontinental Hotels Group plc (IHG) and Morgans Hotel Group Co. (MHGC). The stock with Zacks #1 Rank (Strong Buy) is 7 Days Group Holdings Ltd. (SVN).
We believe companies such as Wyndham (WYN) are better positioned as they are likely to benefit from their repositioning as a more fee-for-service based business. Marriott and Starwood should also benefit from their global pipeline.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=2679.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4581.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/ZacksResearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
SOURCE Zacks Investment Research, Inc.