The aftermath of the two hurricanes that recently devastated Florida has shed light on an unexpected trend in the hotel industry. While natural disasters often bring devastation and disruption, they can also have a surprising impact on regional hotels that escape damage. According to analysts, the recent hurricanes, Hurricane Milton and Hurricane Helene, are expected to have a significant impact on hotel performance in Florida, with major chains such as Marriott and Hilton poised to benefit due to increased demand from displaced residents and relief workers.
The impact of the hurricanes is multifaceted. While select-service and economy hotels often see gains, full-service and resort properties may face losses from cancellations. The extent of the impact will depend on the severity of the damage and the ability of hotels to maintain operations. Analysts at investment banks Bernstein, Baird... and Truist expect the hurricanes to impact hotel occupancy and revenue in Florida for months to come.
A closer examination of the performance of hotels and short-term rental sector stocks reveals a more nuanced picture. According to the Skift Travel 200 (ST200), a benchmark that combines the financial performance of nearly 200 travel companies worth more than a trillion dollars, the industry is experiencing a mixed bag. While some hotels and short-term rental companies are seeing increased demand and revenue... others are facing losses and cancellations.
The ST200 provides a comprehensive view of the hotel industry's financial performance, making it a valuable tool for investors and industry observers alike. The impact of the hurricanes can extend into future quarters, affecting both revenue per available room and property insurance rates. While the short-term devastation caused by the hurricanes is significant, the medium-term impact on hotel performance can be positive.
As displaced residents and relief workers stay in hotels, "they can provide a much-needed boost to the local economy." The infrastructure investments made to support recovery efforts can also stimulate growth and attract new visitors to the region. According to Skift, the current performance of hotels and short-term rental sector stocks within the ST200 is providing valuable insights into the impact of the hurricanes.
As the industry continues to adapt to the new reality, "it is likely that the trends identified by analysts will continue to unfold." With the ST200 providing a comprehensive view of the hotel industry's financial performance, investors and industry observers will be able to track the impact of the hurricanes and make informed decisions about the future of the industry.
An uncomfortable truth is emerging in the aftermath of two hurricanes making devastating sweeps through Florida. Natural disasters can be good for business at regional hotels that escape damage. Hurricane Milton and other storms are expected to have a significant impact on hotel performance in Florida, with major chains like Marriott and Hilton poised to benefit due to increased demand from displaced residents and relief workers. While select-service and economy hotels often see gains, full-service and resort properties may face losses from cancellations.
The impact of hurricanes can extend into future quarters, affecting both revenue per available room and property insurance rates.
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