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High-Flying REIT Lodging Sector Crashes: Ebola Concerns Or Profit Taking?
Hotel REIT shares dove into a veritable sea of red ink during trading on Wednesday October 1 — kicking off a weak Q4 for one of the strongest REIT sectors during 2014.
During the Great Recession hotel stocks languished as companies cut business travel expenses, while job losses and weakened consumer confidence devastated popular resort and vacation destinations. However, during 2013 and YTD, the lodging REIT sector came back from the Great Recession with a vengeance.
The performance set the stage for several hotel REIT IPOs, including Blackstone's huge Hilton Worldwide Holdings Inc.'s record-breaking debut.
So why did shares plunge on Wednesday?
The decline followed reports of one confirmed ebola case in Texas. That case has started to make people nervous; additional reports of Ebola cases could create an environment where the travel and hospitality industries would once again see weaker performance.
Big Picture Has Been Positive
Three of the strongest performers in the lodging REIT sector YTD have been the Ashford Hospitality Trust, Inc., Strategic Hotels and Resorts Inc, and Pebblebrook Hotel Trust.
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It's not the hotel room. It's the plane. "De PLANE! De PLANE!" Some experienced people are currently shorting certain American airlines, if only because private jets are "the only way to fly!"
Hotel Impossible, or Flip that Hotel. Hotels converted to apartments in view of the projected rise in rental prices over the next five years. For rent studio apartment, no kitchen, comes with TV, vibrating mattress and continental breakfast.
Ebola alert: Hawaii one suspected case, Dallas 100 possible cases, Town of Salenano, Texas shut down and under quarantine for a few weeks... As well as the U.S. Territory of Puerto Rico where there's an epidemic...
But don't worry, there's no chance of it getting OUT OF CONTROL...
Look on the bright side.
What sane Mexican, Central American or South American people are going to want to enter the U.S. AT ALL anymore?
Ebola: one simple virus doing what the $38.2 billion dollar Department of Homeland Security (STAZI) could not manage to do at any funding level.