Morgan Stanley Q3 Preview: Another Weak Quarter, but Move to Sidelines Ahead of Vaccine …

According to STR data, total U.S. RevPAR fell 48.5% in Q3 vs. Morgan Stanley’s prior forecast of a 53% decline. However, higher-end chain scales ( …

NATIONAL REPORT—Morgan Stanley & Co. expects relatively weak third-quarter results and tempered commentary, but as a COVID vaccine and elections approach, the company’s strategists see potential for cyclicals to outperform. It still sees group business coming back during a later cycle, with structural headwinds from virtual.

Overall, Q3 U.S. RevPAR beat expectations, but companies are likely to report more in line to slightly below consensus. According to STR data, total U.S. RevPAR fell 48.5% in Q3 vs. Morgan Stanley’s prior forecast of a 53% decline. However, higher-end chain scales (luxury/upper upscale) and urban RevPAR all fell 72%, and these declines do not include closed hotels while the companies’ reports do. Morgan Stanley has cut its company RevPAR forecasts for all of its stocks except Extended Stay America, Inc. The firm is in line (within 2-3%) with consensus RevPAR for the C-Corps, but 6-10% below consensus for its covered REITs.

Morgan Stanley still forecasts U.S. RevPAR falling 47% in 2020 and not returning to peak (2019) levels until 2026, with the stronger Q3 being offset by a weaker Q4. It now expects 2021 RevPAR to be 25% below 2019 levels vs. 21% prior, but 2022 to be 13% below vs. 17% prior. Its expectation for a slower recovery is supported by recent U.S. RevPAR data, which shows that improving trends have stalled. September RevPAR fell 46% vs. August 47%, compared to the prior four months that had each seeing a 5-10% month-to-month improvement. U.S. RevPAR has now declined 48-52% for the past five weeks, which will likely limit management teams’ bullishness into their forward outlooks. However, the firm raised its 2022 forecast as it feels the exit rate in 2021 will likely be higher following the benefits of a vaccine.

Morgan Stanley expects Q3 earnings before interest, taxes, depreciation and amortization (EBITDA) to fall 83% year-over-year. It expects its covered lodging stocks’ Q3 EBITDA to fall from $2.5 billion to about $400 million, highlighting the pressure on the industry. It is below consensus EBITDA for the more asset-intensive DiamondRock Hospitality Company, Hyatt Hotels Corporation, Host Hotels & Resorts Inc., Sunstone Hotel Investors Inc. and Xenia Hotels & Resorts Inc., and above for the more asset-light Choice Hotels International Inc., Hilton Hotels Corporation, Marriott International Inc. and Extended Stay America Inc.

The firm expects hotel owners to continue to experience pressure given stalling recovery trends, greater operating leverage and higher corporate and group mix. It believes investors should generally be more in line with its expectations following company disclosures in the quarter and the STR RevPAR results. European Accor and IHG reported weak Q3 results on Oct. 23. A key focus for its C-Corps will be unit growth outlooks, and if anything has changed from prior earnings when the companies suggested growth of about half of pre-COVID levels. Accor on its Q3 earnings guided to 2-3% growth (vs. a pre-COVID target of 5%), while IHG saw Q3 signings halving, and Morgan Stanley expects net unit growth of only 0-1% in full-year 2020 vs. 4% in 2019, but this is partially a function of one large lost contract.

When Will Convention and Group Travel Demand Return?

Safety concerns and corporate travel bans will prevent the lodging industry from making a post-pandemic recovery until at least 2023, according to the …
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Safety concerns and corporate travel bans will prevent the lodging industry from making a post-pandemic recovery until at least 2023, according to the latest report from CBRE Hotels Research.

READ ALSO: Hotel Development Pipeline to Slow: HVS

The Future for the Lodging Industry: When Will Convention and Group Demand Come Back report also notes it will take until 2024 to 2026 for upper-tier hotels to reach the nominal RevPAR levels of 2019.

The return of group and business travel is a major factor in the recovery of the hotel industry. The report states the RevPAR in dense urban markets remains more than 80 percent below 2019 levels. The return of corporate demand will be a key driver of recovery in those markets. In 2019, corporate demand made up almost 50 percent of the demand for upper-tier markets that year.

There is also economic evidence that business travel is good for the corporate bottom line too. An Oxford Economics study found for every $1 invested in business travel, firms get $12.50 in incremental revenue. The same research found eliminating business travel reduces profits by 17 percent in the first year. And executives and business travelers estimated 28 percent of their business would be lost without in-person meetings.

While virtual meetings have become commonplace during the COVID-19 crisis, CBRE predicts “once travel starts up again the competitive nature of the business and sales will spur in person-meetings again.”

U.S. Hotel Occupancy by Location Type for Upper-Tier Hotels. Chart courtesy of CBRE Hotels Research

Anticipating the workforce will remain more remote, the CBRE report states those workers will be demanding more opportunities to connect with people at conferences and conventions. That desire for face-to-face communications will be another factor driving business travel after the crisis has passed, according to the authors of the report, Jamie Lane, senior research director of economics and forecasting; Jack Corgel, managing director at CBRE Hotels Research, and Bram Gallagher, senior economist with CBRE Econometric Advisors.

State of the U.S. hotel market

Following the abrupt shutdown in March, there was a spike in hotel demand in April and May as the country slowly began to reopen. The study authors said they expected to see some small group meetings return soon after, but once coronavirus cases began increasing over the summer, demand slowed again and it became clear there would be no corporate travel demand in the fall.

Urban markets have been hit particularly hard. More than half of New York City hotel guestrooms are still closed and RevPAR in markets like New York City, San Francisco, Chicago and Washington, D.C., remain more than 80 percent below 2019 levels. That number has held steady since April, the report states. The urban markets are also experiencing 15 percent occupancy and a nearly 35 percent decline in year-over-year ADR change.

Meanwhile, drive-to leisure and resort locations have begun to slowly recover, particularly on weekends. Air travel also seems to be happening more frequently on weekends, but overall it is down 70 percent compared to 2019.

U.S. Hotel Y-o-Y Changes in RevPAR by Market. Chart courtesy of CBRE Hotels Research

The report said fear and frugality are inhibiting all forms of travel. CBRE cites a July survey from Freeman and the Atlanta Convention & Visitors Bureau that found safety concerns are the main reason businesspeople aren’t traveling, with 90 percent of respondents saying safety factors will have the most influence on when they attend in-person business events again. Other concerns were: availability of a vaccine (more than 50 percent); safety practices in place for travel and at the event (40 percent); availability of a COVID-19 treatment drug (36 percent); no new coronavirus cases where event is held (20 percent); and no new cases of COVID-19 where the respondent lived (6 percent).

Economic factors also played an important role for 72 percent of the respondents. Company travel bans were cited by 31 percent. Other considerations included: hotels reopening (27 percent); consumer spending increasing (26 percent); and airlines reporting increased demand (19 percent).

Read the full report by CBRE Hotels Research.

Five reasons why affiliate marketing keeps on growing

Affiliate marketing optimises data lead strategies. Affiliate … Strategy matters when dealing with affiliates as part of your marketing mix. If you need help …

Affiliate marketing is fast becoming an area of expertise within the digital framework. As it becomes better understood, the impact and value that an affiliate program provides within the overall digital marketing mix is becoming clear. Affiliates are not just an acquisition channel, but an extension of your entire marketing function.

From SEO to branding, affiliates play an important role in allowing you to optimise your marketing strategy and reduce your costs. This is definitely one of the most exciting digital sectors to dive into, especially as Covid has impacted the way digital engages audiences online. Let’s take a closer look at what keeps driving affiliate marketing forward as a popular digital medium.

1. Affiliate marketing optimises data lead strategies

Affiliate marketing tracking solutions offer digital marketers a depth of customer data and user behaviours from a variety of traffic sources. The fact that the affiliate channel is so well tracked offers marketers the opportunity to get the best results across a breadth of their digital activities. You are able to look at the multiple sources of traffic your affiliates generate and determine where best to spend your own budget to target more and augment their delivery. All affiliates and managers need to have a good grasp of their data to know where changes need to be made to hunt down that next goal and major milestone.

To help support this, tracking programs have become incredibly sophisticated. Many different aspects can be tracked and analysed on the customer awareness and user conversion journey to ensure that all behaviours are captured and then incentivised appropriately. Affiliate tracking can also be served alongside media buying, which gives marketers a bigger picture view of where and how customers are finding their brands and when in that journey they are converting. Attribution channel marketing can utilise this data to effectively reduce your costs.

Revenue wastage, fraud and lack of transparency can all now be monitored so easily in this channel, alongside influencer marketing, PPC and traditional advertising – which are all worth pursuing, but still come with a high risk of the unknown and other fraud, unlike the transparency you can achieve within affiliate marketing.

2. What other channel can provide flexible and market reactive pricing?

The right affiliate program will be agile and able to adapt commercials as needed. They are often set up to react to market forces, changes in behaviour or pricing models for traffic, which is something easily done in an affiliate program compared with other advertising or paid media channels where contracts and spaces are booked months in advance.

This means that affiliate managers are able to change their pricing models as needed to meet demand and user change, or augment campaigns that are launching at a higher brand level. Pricing models can be changed when they need to be, and this flexibility of working can help to complement brand marketing as is sometimes needed.

Since budgets are more flexible, it means you can set up a system of pay on performance. This helps to lessen the risk that can come with advertising.

3. Affiliate marketing remains a key driver for users and customer acquisition

No matter how the industry might change, there is no denying that affiliate marketing has remained a key driver for customer acquisition. It is thought that some 20% of marketers in a recent survey from Forrester Research delivered by PepperJam still rank affiliate marketing as the highest customer acquisition channel within the overall marketing mix one could draw on. In the same survey, 33% of marketers also believed that affiliate marketing programs were highly successful when it came to driving customer acquisition efforts, with a further 42% classing them as successful.

These stats serve to confirm why affiliate marketing remains a popular choice for acquisition within digital and why chief marketing officers and other key brand stake holders need to be learning more about this popular form of marketing and how to harness it.

4. Affiliate marketing plays a role at every stage in the customer’s buyer awareness journey

Affiliates provide services and content that stimulates buyers to purchase at each stage of the awareness cycle prior to purchase. From content sites to tools and reviews and money back voucher codes, affiliates have built businesses around understanding your customers needs intimately. They have built their brands round popular niches and search terms, and can add value to your business in every stage of the buyer journey – if you let them in!

Brands need to understand this and use their affiliate programs to augment their other advertising and brand activities. This should also help to deliver the best possible ROI results. That same survey from Forrester Research and Pepperjam showed that 46% of marketers believed affiliate paths increased ROI compared to other marketing channels. It is key in driving the customer’s journey forward, no matter what the end goal or product might be.

5. Affiliate marketing is a popular alternative to paid media sources

Many countries or sectors have some stringent regulations and guidelines in place when working with affiliates. Strategically, these need to be taken into account. However, this can also lead to an awful lot of misunderstanding and mismanagement on the part of affiliate marketing managers, which in turn give affiliates a bad rep. Poorly maintained or managed affiliate marketing programs will, in many businesses, have caused a loss. Therefore, it is imperative that strategy is considered prior to launching an affiliate program on mass – or even in a new region where your brand might want to expand.

Asking an expert to help with this can save loads of time being wasted or marketing money being misspent, trying to achieve goals that aren’t realistic within the affiliate channel. By investing in learning and ongoing channel development, many companies are able to boost their affiliate marketing revenue quite substantially.

I’ve been working in affiliate marketing for almost two decades and this has afforded me the opportunity to see brands launch and scale highly profitable and successful programs from a multitude of sectors.

I know this channel can deliver incremental revenue and I can show you how to get that in place to augment your brand reach when managed strategically and with a clear objective and infrastructure being put in place.

It’s one of the reasons why market sentiment is still so favoured within this channel. Strategy matters when dealing with affiliates as part of your marketing mix.

If you need help with yours, speak to an expert

If you want to ensure you give this channel the opportunity it needs to augment your revenue and help your brand growth, talk to an expert.

Affiliate marketing is a channel that, right now, far too many businesses underutilise and many don’t fully understand. With so many tools ready to help a company improve their leads and tracking, affiliate marketing can be used by multiple industries to grow and bring new leads and customers for greater success overall. These five reasons are but just a few of the key points I think support affiliate channel growth – no matter how digital marketing influences change around it.

Lee-Ann Johnstone, chief executive officer at Lee-Ann Johnstone.

Technology Computer-aided Design (TCAD) Market 2020: Industry Size & Share, Business …

Fabless Semiconductor Companies and Colleges. Sales and revenue accrued by each application segment over the assessment period. Product …
Technology Computer-aided Design (TCAD) Market 2020: Industry Size & Share, Business Strategies, Growth Analysis, Regional Demand By 2025

The Technology Computer-aided Design (TCAD) market report begins with the basics in order to provide an overview of the market profile. The report describes the growth of the Technology Computer-aided Design (TCAD) market by portraying information such as the main manufacturing technologies and applications used. This information has also been used to segment the market into different segments. In addition to the above, information about the Technology Computer-aided Design (TCAD) market is based on key players, partners as well as their market revenue in the years 2020 to 2025.

The latest research report on the Technology Computer-aided Design (TCAD) market closely examines the various growth drivers and existing challenges in the industry vertical so as to fabricate a detailed graph of the revenue potential. Moreover, it explores all the possible growth avenues and offer a conclusive overview for business expansion. Further, it reviews all the various sub-segments to impart a deeper understanding of the market outlook.

As per the report, the market is projected to amass substantial returns registering a year-over-year growth rate of XX% over 2020-2025.

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As the Covid-19 pandemic continues to wreak havoc across the globe, its impact on businesses has proven to be mixed. While some industries remain unscathed, others will continue to tackle challenges even once the economy bounces back from this crisis.

Almost all businesses are charting a new course of action to cope up with changes in the business landscape to ensure profitability in the forthcoming years. Our complete evaluation of this industry can help you strengthen your strategies and develop robust contingency plans.

Key highlights of the Technology Computer-aided Design (TCAD) market report:

  • Fluctuations in the growth rate of the market and its sub-markets.
  • Total sales volume and overall market revenue.
  • Key industry trends.
  • Growth opportunities.
  • Positives and negatives of direct and indirect sales channels.
  • Top distributors, dealers, and traders in the industry.

Technology Computer-aided Design (TCAD) market segmentations included in the report:

Regional bifurcation: North America (United States, Canada and Mexico), Europe (Germany, France, UK, Russia and Italy), Asia-Pacific (China, Japan, Korea, India and Southeast Asia), South America (Brazil, Argentina, etc.) and Middle East & Africa (Saudi Arabia, Egypt, Nigeria and South Africa)

Assessment of the regional markets at country level.

  • Sales amassed, revenue generated, and market share attained by each region.
  • Projections concerning the revenue and growth rate of each region over the forecast timeframe.

Product types:

  • Conventional TCAD and Atomistic TCAD

  • Market share with respect to the sales netted and revenue garnered by each product category.
  • Product pricing patterns.

Applications spectrum:

  • Integrated Device Manufacturers
  • Fabless Semiconductor Companies and Colleges

  • Sales and revenue accrued by each application segment over the assessment period.
  • Product pricing with respect to their application scope.

Competitive outlook:

  • Synopsys
  • Cogenda Software
  • Silvaco
  • Crosslight and Global TCAD Solutions

  • Basic company information and insights on the manufacturing facilities in regions served.
  • Product and service portfolio of the listed companies.
  • SWOT analysis of each contender.
  • Pricing model, sales volumes, net revenue, gross margins, and market share of the companies in question.
  • Case studies on the commercialization rate, market concentration ratio, popular business tactics, and other business centric facets.

Key Queries Addressed in The Report:

Who are the leading players in the market?

Which factors could potentially limit the growth of the market during the forecast period from 2020 to 2025?

What is the regional concentration of the leading companies operating in the market?

Which regional market is offering attractive growth opportunities to the leading players?

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Coastal towns hold BC lead in home price increase

The Vancouver Island Real Estate Board (VIREB) recorded 1,287 sales in … “The strength of our housing market has surprised us somewhat,” said …

In what real estate agents say is partly a pandemic-driven exodus from the Lower Mainland, smaller centres on the Sunshine Coast and Vancouver Island are shattering records for home sales and price increases this year.

In Powell River September home sales soared 152 per cent from the same month a year earlier and average prices increased 30 per cent, the second time in three months that the town of about 14,000 has led the entire province in price increases, according to data from the Powell River Real Estate Board.

The average home price in Powell River is now $440,011, the second-lowest in the province behind northern B.C. and the Kootenays. As a comparison, the median price of a standard two-storey house in Metro Vancouver is now $1.9 million, and the median price of a bungalow is $1.45 million, according to a Royal LePage price survey released October 14.

The BC Real Estate Association confirmed that the total dollar volume of Powell River residential sales surged 194 per cent in September – by far the biggest increase in B.C. – to $24.6 million.

“House prices are at record highs here,” said Royal Lepage agent Josh Statham in Powell River, who said the bulk of buyers are coming from the Lower Mainland, particularly from Squamish.

Statham added the Powell River market is dominated by detached houses, which he credited to the number of people working from home and seeking more space and privacy.

“It used to be that buyers stumbled on Powell River on their way to Vancouver Island,” Statham said, “but now they are coming straight here.”

Vancouver Island north of Victoria is also setting sales and price records this year, posting a 100 per cent sales increase in September, reports the BCREA, with the average home price up 15.6 per cent to $552,678.

The Vancouver Island Real Estate Board (VIREB) recorded 1,287 sales in September compared to 692 in September 2019, with half the sales this year being detached houses

“The strength of our housing market has surprised us somewhat,” said VIREB president Kevin Reid. “We frankly did not expect it to recover so quickly from the COVID-19 effect.”

Reid attributes the recovery partly to pent-up demand and low mortgage rates, but added “we have noticed that some buyers are advancing their retirement plans due to the pandemic. Economic uncertainty is motivating other consumers to downsize and reduce their debt load.”

Vancouver Island is a popular retirement destination and an attractive alternative for millennials seeking the West Coast lifestyle for less money than in Vancouver, he said.

After a sharp run-up during the summer, home price increases have moderated in most Island communities.

In Campbell River, the benchmark price of a single-family house hit $454,200 in September, a small increase over last year. In the Comox Valley, the benchmark price was $523,500, a slight dip from one year ago. Duncan reported a price of $489,000, an increase of 1 per cent from September 2019.

Nanaimo’s benchmark price dropped by 3 per cent to $553,600, while the Parksville-Qualicum area saw its benchmark price increase by 3 per cent to $612,800. The cost of a benchmark single-family home in Port Alberni reached $329,500, up 2 per cent from one year ago, according to VIREB data.