In our view, the lodging and travel sector will be among the last to recover once the pandemic has subsided–as the need for social distancing, quarantine, and travel restrictions extends into 2021–and could be several years before a full recovery. With continued volatility in earnings expected, the ratings trend for hotel operators will be decisively negative this year. The lodging sector globally has a high number of investment-grade companies, and six issuers rated ‘BBB-‘ have negative outlooks, therefore at risk of becoming fallen angels.
For the broader industry, we expect that revenue could decline by 50%