Just like we predicted, hotel occupancy is surging, making now perhaps a great time to get invested with Phoenix!
A special note: our next dividend distribution is for shareholders of record on June 30th, paid July 15, so to receive this dividend, please invest today and check the bonus shares program.
Since the global low of April 2020, average daily rate (ADR) of hotel rooms has climbed steadily. According to forward looking Amadeus data for June, July, and August 2022, the worldwide average ADR is over 11% higher than in 2019.
Considering occupancy alongside a persistently short booking window (number of days travelers are booking in advance of their trip) things look even more promising. This data shows that the significant majority of trips (54%) are currently being booked 0-7 days before travel, which means that hotel occupancy rates currently recorded for the summer months could increase significantly.
Hotels can be inflation fighters
Adjusting prices (read: mostly upwards) based on the time travelers book their stay is one way that hotels stay ahead of changes in inflation, a particularly useful ability in today’s economy.
All this data falls in line with Phoenix’s REIT. By purchasing Premium Business Select Hotels at Covid-reduced prices, we have set up high room for growth throughout the travel comeback of 2022. As experienced owners and operators, we are working tirelessly to improve facilities, increasing revenues, and profits, for our Investors. We seek out hotels that meet stringent criteria: strong national brands (e.g. Hilton and Marriott) with positive cash flow, market leadership, multiple revenue sources, and competitive pricing.
We anticipate the liquidation of our investments—meaning we plan to sell hotels—within three to four years, without any reinvestment of capital. Assuming we meet our time horizon goal, investors can expect to receive their initial investment back, plus or minus appreciation. This is in addition to the monthly dividends we have been distributing, which thus far have consistently surpassed our targeted preferred return of 8% annualized. In the months of April and May we distributed a 10% annualized return and we expect to be able to pay out distributions exceeding 8% in the foreseeable future.
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