Wednesday was a busy day for the country's leading hotel chains. Hilton Worldwide (HLT), Hyatt (H) and Marriott (MAR) all posted quarterly results, giving the market a great snapshot of the lodging industry.
Spoiler alert: Things are looking good.
It's the perfect climate for hoteliers. The economy's improving, and that historically translates into a pickup in both corporate and leisure travel. Chains can naturally take advantage of the uptick in demand to push their night rates higher.
With more folks checking in and hotels armed with the flexibility to charge more, it's the perfect two-ingredient recipe to boost revenue per available room -- or RevPAR -- which serves as the best indicator of industry health. We arrive at RevPAR by multiplying the average nightly rate that a hotel charges by its occupancy percentage level during the period.
Pair Us, Hilton
Hilton's been enjoying its return as a publicly traded company, closing out the holiday quarter in fine fashion. RevPAR rose 6.6 percent for the quarter, climbing 7.1 percent for all of 2014. Healthy occupancy levels and rates should continue. Hilton is targeting RevPAR to move 5 percent to 7 percent higher in 2015.
Hilton has been growing through acquisitions, developing new brands, and converting non-Hilton hotels. Its portfolio today consists of 4,322 owned or franchised hotels and timeshare properties, offering 715,062 rooms in 94 countries and territories. It went public, again, at $20 a share in late 2013.
Hi at Hyatt
Hyatt's comparable systemwide RevPAR rose at a less impressive 3.1 percent clip, but the hotelier points out that it would have been a 5.1 percent boost if it weren't for currency fluctuations. Things were even better for its stateside full-service hotels, which checked in with a 5.8 percent pop in RevPAR.
Chicago-based Hyatt is the smallest of the three chains that reported on Wednesday, but it still covers a lot of territory. Hyatt watches over 578 hotels across 50 different countries. Last week it moved to make Wi-Fi a free standard feature for guests at all of its properties.
Swing High, Sweet Marriott
Hilton and Hyatt reported quarterly results on Wednesday morning, and Marriott followed at the end of the trading day. Its RevPAR performance was in line with Hilton's results earlier in the day. RevPAR rose 6.2 percent for the quarter and 6.6 percent for the entire year. Like Hilton, Marriott is targeting RevPAR growth of 5 to 7 percent in 2015.
Marriott's another global juggernaut, with 4,175 properties and timeshare resorts offering a total of nearly 715,000 rooms. Marriott turned heads earlier several weeks ago when it teamed up with the American Hotel & Lodging Association to lobby for the right to jam personal Wi-Fi hotspots in vulnerable conference room areas. It backed down after it made waves for all the wrong reasons.
Inns Are In
It's a good time to be housing overnight guests professionally. The global economy is showing signs of life, and even the volatility in currencies can be tied to an uptick in foreign travel for those trekking out to countries where they can get more for their money.
Keep an eye on RevPAR. It's the ultimate measuring stick in sizing up a chain's ability to fill its rooms and command compelling rates. With the industry leaders improving and pointing to another upbeat year ahead, it may make sense for travelers to check into these hotels as investments, too.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Hyatt Hotels. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.
9 Hotel Scams and Annoying Fees to Watch Out for
Hilton, Hyatt and Marriott Check In and Check Out
After you check in, the room phone rings, allegedly from the front desk. There's a problem with your credit card, the operator says, please give me the account numbers again. To pull it off, all a criminal has to do is trick their way through a hotel switchboard and catch a patron in the room. If you get a call like this, hang up, call the operator, and ask if there's a problem. That's a good habit at home, too. Hang up and call back. If there's really a problem, don't reveal your number over the phone. Just walk back to the front desk.
"You find a pizza delivery flyer slipped under your hotel door," the FTC says. "You call to order, and they take your credit card number over the phone. But the flyer is a fake, and a scammer now has your info." I've not seen widespread incidence of this. it would be pretty brazen for ID thieves to physically walk around hotel hallways, where cameras might be used to identify them. Still, the same principal applies. Use a smartphone to double-check the phone number you see on any flyer placed in your room before you order pizza.
The single easiest way for a hacker to hijack your computer is to set up a rogue hot spot and trick you into connecting to it. "Oh, free WiFi," you think. While that's a very real problem, it's also not terribly likely in a hotel room. After all, to be close enough to pull it off, the criminal's technology would in most cases have to be inside the hotel. That's a risky proposition. On the other hand, you might be visiting a lot of strange coffee shops on the road, where rogue Wi-Fi is a more likely possibility. It's always smart to double-check the safety of the networks you connect to, however. It might be wise to stick with your smartphone's connectivity, if that's possible.
The more expensive the hotel, the more likely you will be charged a hefty Wi-Fi fee of $10-$15 per day. The new trick I've seen lately is for hotels to offer "free" Wi-Fi in the lobby but charge for access in the room. Best way to avoid that fee? Before you leave, make sure you know how to use your smartphone for broadband access.
Hotels have a love-hate relationship with websites like Priceline (PCLN) or Expedia, which help them fill rooms,but systematically put downward price pressure on their inventory. Extra fees, added at check-in, are the hotels' way around this problem. Many folks pay online, only to find there's additional charges when they arrive at the hotel. Resort fees are often the biggest culprit. As the name suggests, this fee is most prevalent in restort-y places like Las Vegas.
Hotels like charging to clean your room now, as if that's not included in the price. The worst part of the housekeeping fee: Often, housekeepers don't get any of the money.
More hotels are embracing travelers with pets, and they're charge $10 to $100 for allowing a pet in your room. If you use a site like Expedia to sort through pet-friendly hotels, make sure you manually check the fee. Not all pet-friendly hotels are created equal.
This one bugs me. Some hotels put a safe fee on your bill, even if you never use the safe. You can ask that it be removed. Same for the newspaper fee.
Finally, gone are the days when hotels could be canceled by 6 p.m. on the night of a reservation for a full refund. Cancellation policies are all over the map now and can even vary based on how the reservation was initially made. Never book a hotel without knowing what the cost of a breakup would be. Travel always involves adventure, which involves unpredictability, which means plans change. Make sure you plan for that.