Analyst says REITs felt a greater impact from disruptions during third quarter

The third-quarter earnings season for hotel brands and publicly traded real estate investment trusts came on the heels of significant disruptions to hotel operations in the form of two hurricanes hitting the Southeast U.S. and nationwide labor strikes.

C. Patrick Scholes, managing director of lodging and leisure equity research at Truist Securities, joined the Hotel News Now podcast to provide his takeaways from the earnings calls. The hurricanes and labor strikes were seemingly most impactful for the hotel REITs, he said.

"We saw a number of the hotel REITs take down their earnings numbers," Scholes said, referencing Pebblebrook Hotel Trust, Park Hotels & Resorts, Sunstone Hotel Investors and Host Hotels & Resorts.

While the short-term impacts of the labor strikes were conveyed by executives, there wasn't a lot of color on the long-term effects of the increased wages and benefits received by hotel workers, Scholes said.

"I would say it's probably more of what they didn't say that's more interesting," he said.

Questions also remain on how major weather events will affect costs on the property insurance side. Scholes said the answers to those questions likely won't be answered for another year or so.

For all of HNN's discussion with Scholes, which touched on general takeaways from third-quarter earnings calls and how hotel management companies merging will affect brands and REITs, listen to the podcast above.

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