The hotel industry has bounced back after the Covid-19 pandemic, as a combination of revenge travel and business recovery boomed. Most hotel companies have also embraced the licensing model by selling off their real estate. So, let’s explore some of the best hotel stocks to buy and hold this year.
Summary of the best hotel stocks to buy
There are a few large hotel stocks to buy and hold this year. The most notable of them are Hilton, Hyatt Hotels, Marriott International, Host Hotels, and Wyndham Hotels.
Host Hotels (HST)
Host Hotels has been one of the worst-performing hotel stocks recently. It has dropped by almost 13% in the last 12 months, while most hotel groups have jumped by double digits in the same period.
The main catalyst for the Host Hotel stock will be the latest news that the management was considering selling off some of its real estate in a deal that will value them for about $1 billion, a substantial figure for a company valued at $12 billion.
Host Hotels is different from the other companies in this list because it is a Real Estate Investment Trust that owns buildings and then leases them to operators. Some of its clients are firms like Hyatt Regency, Ritz-Carlton, and Marriott.
Hyatt Hotels (H)
Hyatt Hotels is another good hotel stock to buy and hold this year. It is a top firm that owns popular luxury brands like Alila, Alua, Atona, Destination by Hyatt, and Grand Hyatt.
Its business has done well in the past few years, with revenue rising from $722 million in 2020 to over $3.3 billion in 2023. It has also boosted its profits, with the net profit in the TTM rising to over $1.3 billion.
The main benefit for investing in Hyatt is that it is a global brand catering to high-end travellers. It is also unloading most of its real estate, a move that will make it a highly asset-light company. It has already unloaded owned hotels in deals worth $5.6 billion.
Hyatt stock price is up by over 76% in the last 12 months, a trend that may continue this year. Analysts estimate that the stock will rise to $163, up from the current $154.
Hilton Worldwide (HLT)
Hilton Worldwide is another top hotel stock to buy. In addition to its eponymous brand, the company owns popular names like Waldorf Astoria, LXR Hotels, Conrad, Signia, and Nomad. Its hotels cater for all types of customers, from the high-end to mid-end.
Hilton’s annual revenue has grown in the past few years, moving from $1.52 billion in 2020 to over $4.2 billion in 2023.
Hilton was one of the first companies to embrace the licensing model. The most recent earnings showed that its total revenue rose to over $2.8 billion in the third quarter. Franchise and licensing fee rose to over $698 million, while its owned and leased hotels made $330 million.
The licensing and franchise model ensures that its business generates substantial returns even in the most difficult market conditions.
Marriott International (MAR)
Marriott is a top company that operates in the luxury, premium, select, and longer stays. Its top brands are Ritz-Carlton, St. Regis, JW Marriott, W, and Edition.
Marriott’s annual revenue has jumped from $2.25 billion in 2020 to almost $6.4 billion in 2023. Its annual profit jumped from about $1 billion to $3.08 billion in the same period. These numbers mean that the company’s business will continue doing well, with its annual revenue expected to be $25 billion and $26.63 billion in 2024 and 205, respectively.
The othe top hotel stocks to consider are MGM Resorts, Choice Hotels, and Wyndham Hotels.
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