Are there monsters under the bed?

The sector was in a frenzy of facts and chat this week, as hotel companies raced to get their results out before Halloween, ensuing that they can dress up like ghouls and go and frighten the neighbours unhindered by the strains of work. One assumes. 

And the reassuring news for the market was that they were keeping the frighteners for the big night, with nary a jump scare between them on results day.

For those of a nervous disposition, Hilton was always going to be the best place to begin, with sector golden retriever Chris Nassetta unlikely to deliver any shocks unless he gains access to your favourite slippers. And indeed, it was all smiles and belly rubs for the CEO as he told analysts that he was very chipper about the savings people had stashed away and were planning to spend on “experiences, international travel, pent-up demand and then incremental demand associated with people having to run their businesses and gather for meetings and events”. He was no more concerned with any other calls on these savings than a dog would be about changes to the offside rule. Liver treats all ‘round.

At Pandox, where the approaching hotel markets day comes with the promise of dogs, there was also a significant amount of tail wagging, with post-pandemic hotel markets returning to a “more or less normal seasonal pattern and business mix”. The risk of possible higher yield requirements was having no impact as yet on the transactions market and the group was confident that it would continue to slice and dice its portfolio a maximise happiness for all. Residents of Bath, where the group recently acquired the Hilton, will be hoping this extends to a complete overhaul of the building, which has been terrifying everyone with even moderate eyesight for a number of decades. 

Geoffrey Ballotti, Wyndham CEO, was positively Nassetta in his bounciness, with system-size growth of 4%  – up 9% internationally. The company completed the acquisition of Vienna House, which has added some upscale and midscale fun to its portfolio. Regular readers who can retain facts for a week or so will recall that Marriott is now looking more favourably on the mid market, will the two meet for drinks and snacks in the middle? 

Resolutely in the budget sector (but really in the mid market, tends to be the feeling of those using them) is Whitbread, unlikely to scare now, on Halloween, or even  after a Scream marathon. The only risk of terror being that it’s so quiet and dependable one could think it’s dead in an armchair, only to start at the occasional snore. 

But while the group may not terrify investors, it’s more than capable of sending chills down the spine of others of a more nervous disposition, in this case the independent sector. The phrase in question being that it sees ‘increased structural opportunities for growth’. For the uninitiated, this translates as ‘you’re all going bust, prepare to be rebranded as a Premier Inn’. Shivers are go. 

There were potential bogeymen at PPHE Hotel Group, although not in the room rate. In London, average room rates for Q3 2022 were up 33.3% vs Q3 2019. Nothing to be afraid of there. But what’s this? “Investments made in technology, automation and energy efficiency, alongside the rate-led strategy, remain key to mitigating industry-wide cost pressures”. Technology? You’ll scare the horses. Or at least other hoteliers. 

One group with a proven track record of terrifying analysts is Accor and the company set the dial to shivery by having their announcement after markets closed, which is never one to still the nerves. In the event, CFO Jean-Jacques Morin was able to reassure observers that he had a good view of November, because it was tomorrow, which is the kind of insight which we’re all here for. As across the rest of the sector, rates are outpacing inflation and this will be the race to watch over the coming months. 

So all clear, no spooks here. That said, the Accor website carries the words ‘Our transparency is the milestone of your trust’. No, no idea. Mysteries do, after all, live on in the hotel sector. 

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