Lodging - First upbeat NAREIT conference for Lodging in several years; key macro & micro takeaways from mgmt meetings

Research evidence excerpt

Lodging - First upbeat NAREIT conference for Lodging in several years; key macro & micro takeaways from mgmt meetings

like a “wash, rinse, and repeat of 1Q” where earnings come-

in ahead of original expectations, driven by better than expected RevPAR

performance. While no company “officially” said 2Q earnings will beat guides and/or

Street expectations, positive tonality from some implies to us that they will (or should,

barring idiosyncratic issues). Specifically:

○PEB: RevPAR for April + May-to-date was towards the high-end of their 2Q guide of

+1-3%. Durning our meeting we asked them if June should be the strongest growth

of the quarter to which they affirmatively replied; to us this implies the company

should come-in at the high-end or above their 2Q RevPAR guide.

○PK: RevPAR was +1.4% in April, +4.4% in May, and says June will be the strongest

growth month of the quarter. To us this implies the final 2Q results will be at or

above current consensus for +2.4%.

○RHP: Sees 2Q in-line to slightly better than internal expectations.

• A wildcard to upcoming earnings, barring an “unfavorable executive order”

that derails the industry’s positive momentum, will not be if companies beat

initial and current consensus expectations, but will be if they organically raise

expectations for the back half of the year. While hardly a sure thing they will in

our opinion (a high-class problem in our view), we see a higher probability of this

occurring than we did going into 1Q earnings. Recall that for nearly every lodging

company, 1Q earnings and guide were a beat and subsequent 2026 raise by the

amount of the beat to full-year guides. While every management team was the most

upbeat we have seen/heard them in several years, we still sensed the theme of