RJ Hamster
The Challenge of the ‘K-Shaped Economy’ in Hospitality
| The Challenge of the ‘K-Shaped Economy’ in HospitalityBy Marc Chaikin, founder, Chaikin AnalyticsYou might have heard about the “K-shaped economy” lately… Folks are using the term to describe current conditions. Specifically, it refers to how some people are doing great in the current economy… while others are struggling mightily. That’s where the “K-shaped” part comes in. One part of the K is going up. But the other part is going down. It’s a fair description of what’s happening right now… Recent data shows that the top 10% of Americans (in terms of income) account for more than 49% of all consumer spending. To put that number into perspective, the percentage was in the 40% to 45% range for most of the 2000s and 2010s. And it was around 35% in the early 1990s. Research from Bank of America (BAC) paints a similar picture… Its latest numbers show that higher-income consumers increased their spending by 2.7% year over year in October. That compares with 0.7% growth for low-income households. It’s not just about spending. Wages are rising much faster for higher-income folks. Bank of America found that wages for high earners grew by 3.7% year over year in October. Meanwhile, year-over-year wage growth that month was just 1% for lower-income households. The numbers don’t lie… America’s top 10% is spending a lot. And most other folks are holding steady or pulling back. The hotel industry is seeing a similar situation…Recommended Links:The Stocks That Save AmericaTwo of the world’s most connected investors recently revealed what could become the biggest stock market story of our time. That’s because a powerful new “trillion dollar” force – spearheaded by both the White House and Wall Street – is reshaping wealth in America. For those who get in position, the potential upside could be astronomical. Click here for the full story (and a free stock recommendation).[FINAL HOURS] Marc Chaikin’s Top Stock for 100% Potential GainsMarc Chaikin just revealed a stock flashing VERY BULLISH in his Power Gauge system. This system has identified at least eight of the top 10 stocks of the year – every single year – for the past nine years. And Marc believes this stock could double in the coming months. But you only have until MIDNIGHT TONIGHT to get access to this recommendation at 70% off. Click here for the details.Earlier this month, hotel giant Marriott (MAR) announced its latest quarterly results. The company beat expectations for revenue and earnings. And it was mainly thanks to sales from its luxury properties like Ritz-Carlton and St. Regis. On the other hand, the “budget” side of the business was weak. Marriott’s results aren’t unique. The entire hotel space is seeing the same thing… The better a hotel is, the stronger its bookings. In other words, there’s a clear connection between a hotel’s quality/price and its revenue. Regular readers will recall that yesterday, I discussed how high-quality service is critical for successful companies in the hospitality space. That’s especially important, because the industry is in a tough spot right now… Industry tracker CoStar recently downgraded its outlook on U.S. hotel demand. It expects demand to fall 0.4% in 2025. That’s not a big decline… But it would mark the first annual drop since the pandemic. The drop isn’t hitting all hotels equally. Earlier this year, CoStar’s data showed that luxury and upscale hotels had been seeing rising demand. Meanwhile, the worst declines had been in the “economy” segment – the lowest tier in terms of hotel quality. Put simply, it’s more important than ever for hotels to maintain or improve their service quality. Keep in mind that hospitality companies face a lot of the same price pressures as regular folks. They’re vulnerable to rising labor costs, food and beverage prices, insurance premiums, and property taxes. With all this in mind, let’s next turn to the Power Gauge for a bigger overview…Our System Is Cautious on This Industry Right Now As you would expect, regular folks spend less when their economic future is murky. It all ties into broader consumer sentiment. And of course, it cuts across multiple industries. Now, as regular readers will recall, my colleague Ethan Goldman touched on the Hotels, Restaurants, and Leisure industry in an essay last month… Right now, this industry has 119 stocks with Power Gauge ratings. And it includes big names in the hospitality space like Marriott, InterContinental Hotels (IHG), Hilton Worldwide (HLT), and Hyatt Hotels (H). Back in late October, only six of the stocks in the Hotels, Restaurants, and Leisure industry received a “bullish” or better grade. Today, that number only stands at eight. And this compares with 57 stocks with “bearish” or worse ratings. Folks, I’m not saying hotels are doomed… But again, in a K-shaped economy, it’s especially important for hotels to focus on high-quality service. And at the very least, our system is flagging caution for the broader Hotels, Restaurants, and Leisure industry right now. As I said yesterday, investors in the space need to pay attention to the best operators. Good investing, Marc Chaikin Editor’s note: No matter where you stand in the economy, one thing is clear… It’s critical to make sure you’re taking control of your finances. And Stansberry Asset Management’s (“SAM”) latest webinar covers how a quick year-end review could uncover ways to reduce your 2025 tax bill and strengthen your financial plan for the year ahead. SAM is a U.S. Securities and Exchange Commission-registered investment adviser, separate from our corporate affiliate Stansberry Research. The firm’s latest webinar is led by Senior Wealth Manager Ryan Walker, CFP®, CEPA. As he says, from taxes and investments to income planning, there’s still time to take advantage of key opportunities before December 31. In the webinar, Ryan discusses how proactive planning now can help you reduce your tax burden and make the most of the year ahead – including…Year-End Essentials – Key moves to consider before December 31 to help reduce taxes and optimize your portfolio.Coordinated Planning – How to align your investment, tax, and income strategies for the year ahead.For Families and Business Owners – Planning opportunities designed to support your family goals and business success.Watch the video to make sure you’re taking advantage of 2025 opportunities while you still can. You can register to do so for free right here.Market ViewMajor Indexes and Notable Sectors # HLD: BULLISH NEUTRAL BEARISH  Dow 30-0.79%715 8S&P 500-1.52%81247 172Nasdaq-2.37%1751 32Small Caps-1.85%3711112 426 Bonds+0.39%— According to the Chaikin Power Bar, Large Cap stocks are more Bearish than Small Cap stocks. Major indexes are mixed.* * * *Sector TrackerSector movement over the last 5 daysConsumer Staples-0.34%Utilities-0.74%Health Care-0.86%Real Estate-1.13%Communication-1.75%Energy-1.79%Industrials-2.74%Financial-3.53%Materials-3.55%Consumer Discretionary-4.67%Information Technology-5.04%* * * *Industry FocusSoftware & Services109133Over the past 6 months, the Software & Services subsector (XSW) has underperformed the S&P 500 by -13.91%. Its Power Bar ratio, which measures future potential, is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #16 of 21 subsectors.Indicative Stocks AIC3.ai, Inc.ALKTAlkami Technology, IAURAurora Innovation, I* * * *Top MoversGainers WMT+6.46% REGN+4.87%GEHC+3.37% SOLV+2.85%ERIE+2.81%LosersJ-10.95%MU-10.87% HOOD-10.11%PODD-9.66%DDOG-9.49%* * * *Earnings ReportEarnings SurprisesROST Ross Stores, Inc. Q0 $1.58 Beat by $0.17 INTU Intuit Inc. Q1 $3.34 Beat by $0.25  CPRT Copart, Inc. Q1 $0.41 Beat by $0.02 VEEV Veeva Systems Inc. Q3 $2.04 Beat by $0.09 J Jacobs Solutions Inc. Q4 $1.75 Beat by $0.07* * * *You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, click here.You’re receiving this e-mail at pahovis@aol.com.For questions about your account or to speak with customer service, call +1 (877) 697-6783 (U.S.), 9 a.m. – 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized financial advice.© 2025 Chaikin Analytics, LLC. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Chaikin Analytics, LLC. 201 King Of Prussia Rd., Suite 650, Radnor, PA 19087. www.chaikinanalytics.com.Any brokers mentioned constitute a partial list of available brokers and is for your information only. Chaikin Analytics, LLC, does not recommend or endorse any brokers, dealers, or investment advisors.Chaikin Analytics forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Chaikin Analytics, LLC (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation.This work is based on SEC filings, current events, interviews, corporate press releases, and what we’ve learned as financial journalists. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. |
