Strong RevPAR Growth Fuels Hotels and Timeshare Rentals: An Exclusive Interview with Simon Yarmak, a Real Estate Research Analyst for Stifel, Nicolaus Reveals Top Picks and Predictions

Wall Street Transcript

67 WALL STREET, New York - December 2, 2013 - The Wall Street Transcript has just published its Gaming and Leisure Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: U.S. Regional and Emerging Market Hospitality - Gaming Opportunities In Asian Markets - Macau VIP and Mass Market Gaming - Lodging C-Corporations - Timeshare Industry Recovery - Regional Casino Development

Companies include: Starwood Hotels & Resorts Worl (HOT), Marriott International, Inc. (MAR), Wyndham Worldwide Corporation (WYN), Choice Hotels International In (CHH), The Blackstone Group (BX), Host Hotels & Resorts Inc. (HST), Goldman Sachs Group Inc. (GS)

In the following excerpt from the Gaming and Leisure Report, an experienced real estate research analyst discusses the outlook for the sector for investors and provides his top stock picks:

Mr. Yarmak: From 1990 to 2007, the timeshare industry grew at a 13.9% CAGR. In 2007, the industry peaked at about $11 billion a year in sales; during the financial crisis that number dropped to about $6.3 billion, a 43.0% decline. People were rationalizing their purchases and did not have access to credit to purchase the intervals. As the economy and credit markets continue to recover, people feel better about themselves and are making larger discretionary purchases. That, coupled with a more efficient credit markets, has enabled the industry to recover.

TWST: Are there any trends or themes that really stuck out for you in this earnings season?

Mr. Yarmak: Overall, earnings season was pretty strong. Every one of the C-Corps beat Street expectations. Those that provided guidance beat their own guidance. Domestic RevPAR growth was in the 5% to 6% range. Choice was an underperformer, but Marriott, Starwood, Wyndham and Hyatt all had domestic RevPAR up over 5%.

The fourth quarter will be a little bit trickier because of the impact from the government shutdown. Marriott said the company reduced its 4Q13 RevPAR guidance by 100 basis points because of the government shutdown. Choice believed the shutdown reduced RevPAR by 25 to 50 bps, as 615 of CHH's hotels are in close proximity to National Parks. Looking toward next year, Marriott's outlook calls for domestic RevPAR to be up 4% to 6%, and Starwood thinks that worldwide RevPAR will be up 5% to 7%. So overall, 2013 is going to be a pretty good year, and we think the momentum will continue into 2014, once we get past a lot of the noise in fourth quarter.

TWST: What are your thoughts on the announced Hilton IPO?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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