Summary

• It was poised to be a dark winter for the hotel industry, which has experienced a "double-dip" in occupancy over the last month amid the "second wave" of the outbreak.
• Vaccine Hope: The faster-than-expected approval of a coronavirus vaccine has thrown a much-needed lifeline to the struggling Hotel REIT sector, which has surged more than 50% over the last quarter.
• Too far too fast? After this vaccine-driven rebound, hotel REITs are no longer "cheap." In fact, hotels are now the most expensive property sector based on consensus 2021 FFO multiples.
• Every hotel REIT slashed its dividend and it may take a half-decade or longer to return to pre-pandemic levels. Suburban-focused and leisure-oriented properties will bounce far faster than urban business-focused hotels.
• Airbnb's market value is on par with the entire hotel industry combined following its stunning IPO. Short-term home rentals affect urban hotels most acutely, representing a source of "liquid supply" that compromise pricing power on critical compression nights.

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