RDOG - Hotel REITs: Spring Break Is Back

• Powered by Spring Break demand and accelerated by the vaccine roll-out, the recovery in domestic leisure travel - and hotel occupancy - has picked up meaningfully over the past month.
• TSA data showed that travel is now at 60% of pre-pandemic levels after bottoming at less than 5%. STR reported that hotel occupancy has recovered to 80% of pre-pandemic levels.
• The Spring revival comes after a dark winter for hotel REITs, which reported another rough quarter in Q4. Optimism for a post-pandemic recovery has sent hotel REITs surging since late-2020.
• We all need a vacation. While the recovery in leisure travel may be swift, business demand may take a half-decade or longer to return to pre-pandemic levels amid the "new normal" for virtualized work environments.
• We maintain our outlook that suburban-focused and leisure-oriented properties will bounce far faster than urban business-focused hotels - markets that are also more acutely impacted by Airbnb's looming presence.

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