Zacks Equity Research released its Hotels and Lodging Stock Outlook today. According to Hyatt Hotels Corporation and Hilton Worldwide Holdings Inc., the supply-demand environment in the business is favorable with healthy demand growth outpacing levels of supply growth that are still well below long-term averages. This would lead to incremental rate increases, thereby driving RevPar higher. System-wide occupancies in North America appear to be pretty steady and above the prior peak level achieved in 2006 following the gradual improvement in the economy. With the boost in the economic sector and an improving travel and tourism industry, hotel companies are well poised for growth. North America is still the largest market for Starwood Hotels and Resorts Worldwide Inc. In 2014, the company expects another year of robust growth in North America and plans to open about one-third of its new hotels in the region. Owing to the saturation in the U.S market, major hoteliers are exploring growth opportunities abroad. Some international markets offer greater potential based on the higher pace of economic growth. The demand for hotels in the international market is greater than in the U.S. and the pace of recovery is particularly faster. The positive fundamentals in foreign markets have spurred hoteliers to grab a larger piece of the overseas pie. A number of U.S.-based hoteliers are targeting the unsaturated markets of Asia-Pacific, Brazil, Russia, and Africa. Within Asia, China promises lucrative growth opportunities with visits expected to increase substantially in 2014. China is in fact a major contributor to both Starwood Hotels and Marriott International Inc. revenues. Read more over at Zacks.
