Daily Recap

• "No vacancy" becomes "no occupancy." Hotel REITs - along with the global leisure and tourism industry - have been decimated by the coronavirus pandemic, plunging more than 50% this year.
• Following a record year for the industry in 2019, hotels REITs reported occupancy rates below 20% in Q2. Occupancy has recovered to roughly 45% by late-summer, but winter is coming.
• Every hotel REIT has slashed its dividend in an effort to stay afloat, as 40-50% occupancy is needed to "keep the lights on." Suburban-focused and leisure-oriented properties have outperformed urban-hotels.
• Perhaps a more "pure play" on the success of a vaccine than even the pharmaceuticals themselves, a significant "second-wave" of the pandemic would be likely catastrophic for equity holders.
• While leisure demand should bounce back relatively quickly when the pandemic subsides, business and group demand may take up to a half-decade or longer to fully recover.

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Additional Disclosure: It is not possible to invest directly in an index. Index performance cited in this commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Data quoted represents past performance, which is no guarantee of future results. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy.