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-- plans may already be booked but as we move into the second half of this year.
Is now the time to check -- some hotel stock -- joining us now with this second half setup for the hotel sector is will marks.
Managing director and senior research analyst for -- and peace securities.
Some of these have looked a little -- whereas some of the travel sites like Priceline have just taken off when it comes to the actual stop themselves but.
-- pick your favorites in this sector.
It's a little tricky -- -- group tends to trade together all the stocks on average stocks up about 1112% this year.
But you -- -- -- in my.
That arm while light today and so I know it may sound crazy but we we look for sort of flaws in how the market uses.
The group and that found what I think you're going to be a few winners for the second half based on that well as one of one of them Starwood right everybody vigilant about Starwood they've gotten over 50% of their properties outside the United States wouldn't that be a little -- -- I -- got -- slow down now in Asia you've got problems yeah.
Right why I -- I really look at that is being priced and Asian guy I think is priced -- -- its well known that growth is gonna slow and Asia yet at the same time Starwood has a huge pipeline the biggest -- quite a month.
Hotel companies in Asia in terms of new development and -- Europe I think Europe -- kind of training along the bottom and so.
You know yes there could be more downside but I look at Europe as having a lot of upside -- star was more the better positioned there than any other competitor.
I really love how you put that you look for companies where the market has a flawed outlook on them.
Let's get to sum up your other Hixon and you like.
Real estate investment trust says well but let's explain to people but that is a little bit trickier is that not -- mean you're looking that great yields but.
Gotta be careful.
He had been there there's there's more leverage the -- -- more -- of the downside meaning that that real estate investment trust all they do is owned properties they don't operate them so they typically higher.
Operators such as Mary -- and star like -- to run their hotels.
So it is it's more let me there's more leverage because if things go wrong at the hotel the operator doesn't get hurt as much as the owner -- -- but an investor Murray can actually the protect themselves that they you know if your plane to read for what -- gonna get paid in the yield I mean who the what -- which of these do you like.
Probably our -- today are favored to -- not probably.
Is -- hospitality and Reiman was a company called Gaylord Entertainment and it converted to read at the beginning of this year.
I Reiman is really for large convention hotels there's no other company like it.
The protection is that right and pays out about half its capsule as a dividend.
And it's about five point 2% dividend yield I believe.
Yet there's plenty of room for upside because there -- only -- not -- their cash flow.
So I got -- protection and then back to my earlier comment off mining company with flaws Reiman is a stock that a lot of people hate today because.
Its really its focus is on group.
And group recovers later in a cycle they're being concerned about -- bookings being slow but we're starting here signs from channel checks that.
Group bookings are picking up so Ryan would be the -- on that given that they're the hotels average about 2000 rooms inside.
And groups tend to -- ahead.
I want our viewers to know that they should really listen to what you just said you've done the homework here you've looked at the channel checks and you've seen that the bookings now for conventions and things like that.
Have started to come back so so folks when you hear him say Reiman properties where it is now.
Might not necessarily be where it is later it could really see some real revenue.
Let's talk about rev par revenue per available room but when it comes to the entire industries -- looking a little bit better.
It's looking a little bit better there are some some.
Concerns the second half could be a little slower the first half was up a wrap around 6% mean the revenue per available room basically the revenues at hotels.
Before -- -- I was was solid summer leisure travel you don't hear about people canceling their their summer vacations.
So yeah looks pretty good for the second half of the year may slow a little bit in the 5% range the expectation for the year is somewhere between five and 6% -- -- growth.
There is the expectation that next year -- doesn't fourteen picks up a little bit.
And part of that is because.
Maybe the greatest thing going on right now in the hotel sector is almost no supply growth so who would you avoid I mean are you going it when you say no supply growth would you want to be targeting say one of these companies if they've got plans for big construction would you want to be careful of that given what's happening with the revenue from room.
Well I think we've got to do it did that most of the construction actually the most a lot of it is actually New York.
Probably the primary.
Area of new construction and Chicago is another.
But the US construction levels.
Room -- supply growth is -- expected to be less than a percent this year about a percent next year.
I historical averages are about 2.2 percent.
So in general the US isn't really expanding that much in terms of -- supplies -- looks pretty good if you want to hotel in the US.
Perhaps outside of certain areas of New York you're really good shape for the next couple years all right well march I was just thinking as you were doing all this -- you've checked it out so people can check in does not sound like a flat out.
And they -- that time.
Thanks so much all right thank you we need to.
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