Activity Tracker_ Christmas Cheer

Summary of Morgan Stanley Research: Travel & Leisure Activity Tracker Industry Overview - The report focuses on the Travel & Leisure industry, specifically analyzing trends in Hotels, Airlines, Cruise, Foodservice, Gambling, and Pubs/Restaurants. Key Insights Hotel Performance - RevPAR (Revenue per Available Room): - US L4W (Last 4 Weeks) RevPAR increased by 3% compared to previous months, with Q3 at +1% and Q4-TD (To Date) at +3% [16] - Europe L4W RevPAR rose by 7%, with Q3 at +7% and Q4-TD at +6% [16] - UK L4W RevPAR grew by 2%, with Q3 at +2% and Q4-TD at +2% [16] - Occupancy Rates: - Occupancy rates in the US decreased by 1%, while room rates increased by 22% [21] - Europe and UK occupancy rates remained stable [22] Airline Trends - Air passenger volumes in the EU are growing at a mid-high single-digit rate, while US passenger data is slowing to a low single-digit growth [6] - Airline fares are recovering, indicating a positive trend in demand [6] Cruise Industry - Demand for cruises has picked up post-election, with solid pricing and stronger web traffic reported [6] Foodservice and Dining - Reservations for dining out are stronger across the US, UK, and Germany, although UK pubs and restaurants are experiencing weak like-for-like sales [6] Gambling Sector - Gross win margins in the UK have strengthened in November and Q4TD, following a solid online growth of 11% in Q3 [6] Consumer Behavior - Holiday searches are below pre-COVID levels, but web traffic is stronger and pricing remains stable [6] - US hotel website booking trends are weaker for most operators, with IHG showing the strongest performance and Hilton the weakest [43] Economic Indicators - US hotel spending is projected to grow, with a 4% increase in credit/debit card spending on hotels and a 6% increase on travel in October [43] - UK accommodation spending as a percentage of personal consumption expenditures (PCE) has returned to 2019 levels, while restaurant and cafe spending is above trend [71] Additional Observations - The report indicates that the Economy and Midscale chains have recently stopped underperforming, showing a stronger trend in October and November [28] - Delinquency rates in hotels are similar to overall commercial real estate levels and are on a slowly rising trend, with lodging CMBS special servicing rates around 8% [56] Conclusion - The Travel & Leisure industry is showing signs of recovery, particularly in hotel performance and air travel, despite some challenges in specific sectors like UK pubs and restaurants. The overall consumer spending trends indicate a cautious but positive outlook for the industry moving forward.