Langton Capital – 2016-02-18 – Daily Wrap: Disruption in the hotel market, pub trading & other:
Leisure Wrap & Other:
So the trading day is grinding to a close. We’re another day older but are we any wiser? After a day of intensive head-scratching, pen flipping and gossip, we have been considering the following. As always, contact us if you’d like further details:
Accor aims for disruption:
• Change is the only constant, standing still is not an option.
• Accor has acquired a 30% stake in Oasis Collections saying this is ‘the company which pioneered the “Home meets Hotel” category of accommodations, blending the value and authenticity of private rentals with the service, quality-control and amenities of a hotel.’
• Group says ‘Oasis Collections allows us to explore new complementary offer to upscale hotels’.
• Group also announces a ‘strategic investment’ in Squarebreak. It says ‘with this investment, Accorhotels is positioning itself to better understand the expectations of guests in a sector where the stay experience and the quality of service are particularly important.’
• It says ‘in partnership with innovative players, Accorhotels continues to forge ahead along the path of changing and new behaviors in hospitality and travel.’
• We’re currently writing on a number of subjects. Any feedback as to which you consider the most interesting and/or important and/or timely would be gratefully received. Topics include:
o Crowdfunding (hidden risks)
o Slowing London market (hotels and pubs/restaurants)
o Cockroach vs butterfly. That is ubiquity or intense specialisation, which is the better business model?
o Pensions time bomb
o Corporate bond spreads, tighter credit, recession fears etc.
o Probably never get around to writing on it but also – EM debt, threat to US$ value if reserve currency status undermined etc.
Random information, hopefully not all of it useless:
• Intercontinental Hotels up 7% yesterday. Good numbers from Marriott & OK from Accor but what, if anything, else is going on?
• Rally looks to be petering out. Volumes pretty low over the last couple of days, apparently. Suggests that the rally may have latterly lacked conviction. Currently down & looks as though the 4dy winning streak could be broken.
• Sell the rallies say the bears.
• Sterling quite weak. Looks set to test recent lows against both the Euro & the US dollar.
• Unemployment at lowest level since 1975, we’re told – but are we comparing like with like? Were the figures fiddled more or less in 1975 vs today? Or about the same?
• Pig prices really now rather high. Major recent rally means that lean hog prices, after a period during which they were well down on a 12mth view, are now up by 5% over the last year.
We’re so 21st Century, this morning’s Tweets (diff. font size denotes importance):
1. BBPA Policy Director Andy Tighe argues that 1p cut in duty is more than just a token gesture.
a. BBPA: Cutting beer duty will encourage pub visit. Says ‘pub goers and the public in general are hugely supportive of lower beer taxes’
2. A survey by M&C Allegra Foodservice shows just 43% of sector leaders polled believe this year will be better than the last
3. Russian vodka exports have hit a record 10-year low due to falling demand across the West, and particularly Ukraine.
4. Pernod Ricard CEO, Alexandre Ricard, says he expects China demand to fall rather than rise in the near term
5. Campaigners call for ban on extra-large cups of hot drinks in coffee shops & stores due to high amounts of sugar they can contain
6. ONS says prices for alcoholic drinks rose by 5.2% from December to January, 2% higher than during the same period a year ago.
7. Accor FY numbers. Says has produced ‘excellent 2015 results reflecting the benefits of the transformation plan’.
a. Accor reports FY revenues +2.3% at €5.6bn, EBIT +10.6% at €665m and net profit +9.4% at €244m.
b. Accor reports FY numbers, says has seen ‘growth in revenue, a big improvement in earnings and a more robust financial position.’
c. Accor buys 30% of Oasis Collections and invests in Squarebreak in order to stay disruptive
8. Marriott Q4. Diluted EPS 77c (+13%) with constant dollar REVPAR +3.8% in the quarter, revenues +4% (constant currency).
a. Marriott CEO Sorenson comments ‘we are encouraged by recent demand trends. Q4 worldwide system-wide comparable RevPAR rose 4%’
9. Roger Allard says no decision has been taken on whether the struggling leisure company will be taken private
10. Travel company Mark Warner has pulled out of Turkey and cancelled its programme at the Sea Garden Beach Resort in Bodrum.
11. UK unemployment fell by 60k between Oct & Dec to 1.69m per ONS. Rate now 5.1%. Wage growth subdued.
12. Oil price better, trading at around $35 per barrel. Estimates of $50 during H2 may not be too wide of the mark