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How to Play the Hotel Market

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  • Description

    Robert W. Baird senior research analyst David Loeb gives his outlook for hotel industry.

  • Duration 2:07
  • Date

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Hotels got hit hard the slump but at long last the returning to the peak of 07 joining us now with tips on how to play it.

David -- of RW Baird thanks for being with us David.

Occupancy prices revenue per room all up and 2013 is a forecast.

Is it too late to buy some stocks to trade on this.

It's pretty late for a lot of the stocks but there's still a few interesting opportunities we think valuations are pretty full particularly for the owners.

The brand companies look a bit more attractive to us -- -- -- some owners that are pretty interest -- as well let's go to some here pixie like -- -- start there.

Parents my top pick it is -- a leading brand company obviously trades at about.

Ten point four times 2014.

Earnings.

-- it's really cash flow machine be based on very long term fee income from from a management contracts.

And franchise agreements.

And they've been using that free cash flow to buy in stock in a very big way and also to grow their business they're building three hotels on balance sheet.

We think they will sell at least one of those this year may be too and tells them her analyst just -- tells about -- -- -- about a billion dollar market cap hits -- -- the dominant owner of select service.

Hotels in New York so these are Hilton garden -- and courtyards and Hampton -- -- New York City.

That that's -- half of their cash flow the rest comes from other major markets in the east and West Coast.

And -- -- Their margins are very high because of this in New York city's been.

Seeing a great deal of demand growth are citing -- is a a very attractive -- amount and lastly hospitality.

Prospectus trust what is that.

Hospitality Properties Trust -- it's it's a read that that owns hotels.

But owns a -- unique structure that decreases the volatility this -- the 7% yield.

-- company with an investment grade balance sheet and we think dividend growth.

In the year ahead.

So we think that's a very attractive income play for investors that are looking for.

For some kind of broad pound cash return these states -- -- -- come -- nicely done sir thanks very much David love appreciate -- being with us.

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