Disruption is a word that’s kind of tossed around these days. But the idea/concept behind it is that a technology-based innovator will create a product or service so fresh and so new that it will unseat established players and “disrupt” the current industry or sector. So-called disruption is all around us. And some ideas like online shopping are so ingrained in our daily lives, we forget it was once a novelty.
So when a potential disruptor is circling a struggling industry, investors tend to take notice – in a bad way.
However, the recent threats to the various lodging and hotel REITs are overstated. They may not be dividend stalwarts, but they are safe from innovators.
A Continued Downturn
Since the Great Recession and the credit crisis, the various lodging owners have failed to keep up with their other commercial real estate brethren. The hotel REITs have suffered at the hands of a few major factors, including a major downturn in business travel.