Hotel stocks had a dismal 2020, no thanks to the pandemic. The discovery of vaccines brings a glimmer of light to the dimming fortunes of hotels. Mass vaccination means that economic and social activities would return to normal, which kicks hotels back into gear. Apart from that, pent-up demand for vacations and increased consumer savings would mean more people would be traveling next summer. This makes hotel stocks a fair play for bargain hunters. Given this, we have created a list of the ten best hotel stocks to buy in 2021.
Overview of the hotel industry
The hotel industry is made up of businesses that provide hospitality and related services. Though it is closely tied to leisure (hospitality) in a general sense, the hotel industry deals with lodging for guests.
The expansion of hotels has tracked the growth of tourism globally. As social media and technology make it possible for people to discover new places, there would need to be accommodation services that would cater to teeming travelers. The global hotel industry is valued at $600.49bn. The occupancy rate of hotels has increased in the last five years, with Europe having the highest occupancy rate. While the Middle East and Africa are the most expensive region for hotels, Asia Pacific remains the cheapest region.
The hotel industry, which was already suffering from the rise of Airbnb, was heavily battered by the coronavirus pandemic. The restriction on travel and public gatherings meant there were fewer guests and tourists to patronize hotels. However, with the discovery of a vaccine, hotels are expected to fully resume operations. So, hotel stocks are poised to benefit from the recovery.
What are the trading hours for hotel stocks?
Hotel stocks are traded on the US equities market through different exchanges between 9.30 a.m. and 4 p.m. New York Time. They can also be traded after hours (when markets are closed) and Pre-hours (before markets are open). There are also hotel stocks that are sold over the counter. These are stocks not publicly listed but traded through a dealer network instead of a centralized exchange like NYSE and Nasdaq. You can place an order for hotel stocks through brokers or stock trading apps, though the latter option seems more in vogue due to its advantages for remote use.
How to trade and invest in hotel stocks?
Open a trading account
There are a variety of brokers available online and offline with whom you can open an account. Pay attention to commissions and look out for hidden charges like interest on margins or service fees for withdrawals. Also, take note of trading limits and minimum account balances. If you are not fully confident in your trading abilities, go for a full-service broker, but be aware you would pay more in fees.
Choose hotel stocks
Choosing a hotel stock depends on your investment objective. If you are trading long-term, then you would want to pay attention to the company’s fundamentals. If you are trading short term, you should make use of technical analysis. However, always carry out your due diligence before picking a stock to trade.
Once you have decided on the hotel stocks you would like to invest in, then it's time to take the bold step and execute the trade. Make sure you are fully convinced of your decision to buy the stock before you initiate the trade. Unless you have reached your target price or have good fundamentals reasons, do not sell out of panic.
Where can I buy hotel stocks?
Investors and traders can purchase hotel stocks through brokerages or trading platforms. Provided the hotel stock is publicly listed, it is accessible to all potential traders and investors. You may choose to seek the services of a professional broker.
We've shortlisted the best hotel stocks to buy in 2021 and you can start trading them in our recommended brokers by clicking on the buttons of the following table.
Top 10 hotel stocks to buy
Based on a number of parameters, such as the prevailing and anticipated economic conditions, management plans, strategies, and market capitalization, we have compiled a list of the top 10 hotel stocks to buy and hold in 2021:
- Choice Hotels (NYSE: CHH)
- Hyatt Hotels (NYSE: H)
- Hilton Hotels (NYSE: HLT)
- Marriott International (NASDAQ: MAR)
- Wyndham Hotels & Resorts (NYSE: WH)
- Trivago NV (NASDAQ:TRVG)
- Extended Stay America Inc. (NYSE: STAY)
- MGM hotels & resorts (NYSE: MGM)
- Las Vegas Sands Corp. (NYSE: LVS)
- InterContinental Hotels Group (NYSE: IHG)
Choice Hotels (NYSE: CHH)
Choice Hotels is one of the world’s largest franchisors with a market capitalization of $5.5bn. The hotel chain has more than 7,100 hotels located in over 40 countries. Unlike its peers, the stock has recovered considerably well due to growing investor interest as a result of the positive vaccine news. Shares of CHH have returned 12.31% in the last three months.
Hyatt Hotels (NYSE: H)
Hyatt Hotels Corporation, a hospitality company that develops, owns, manages, and franchises hotels, resorts, and other properties. The company has a market capitalization of $7bn. Despite the pandemic's disastrous impact, Hyatt is a stock for the long-term opportunity given its current price. The company is already positioning for the full reopening of the economy. It recently announced an expansion of its luxury lifestyle brand, Alila, in the United States following Alila Napa Valley's acquisition in California. Shares of Hyatt have returned 29% in the last three months.
Hilton Hotels (NYSE: HLT)
Hilton is a hospitality company that owns several hotels under various brands. The global hotel brand has a $30.7bn market capitalization. With 56% of Americans expecting to travel for leisure in 2021, Hilton makes a good buy for bargain hunters. Shares of Hilton have rallied by 17% in the last three months.
Marriott International (NASDAQ: MAR)
Marriott International Marriott operates as hotel franchisors and managers. The company has a market capitalization of $41.5bn. Shares of Marriott are a great recovery play, but also the company’s business model makes it a long term hold. This explains why the stock received an upgrade from analysts at Jefferies. Shares of Marriott have surged by 29.2% in the last three months.
Wyndham Hotels & Resorts (NYSE: WH)
Wyndham is a global hotel franchisor worldwide that operates a portfolio of 20 hotel brands. The company has a market capitalization of $5bn and is operating in over 90 countries. The company’s budget-driven model makes it worth consideration. Shares of WH have returned 19% in the last three months.
Trivago NV (NASDAQ: TRVG)
Trivago N.V. operates a hotel and accommodation search platform. The platform provides users with hotel prices from 1.3 million hotels located in 190 countries. Since the pandemic hit hotels hard, the stock has been battered by the lack of users on its platform. The stock is currently a cheap buy considering that its service usage would spike as the economy reopens further. Shares of Trivago have surged by 103% in the last three months.
Extended Stay America Inc.: (NYSE: STAY)
Extended Stay America is an economy apartment hotel chain that also operates motels. The company has a market capitalization of $2.6bn. Despite seeing a 41% decline in income, shares of the company have rallied by 20% in the last three months. The company could emerge stronger from the pandemic as their rooms can act as temporary residences because they have kitchens.
MGM Hotels & Resorts (NYSE: MGM)
MGM Resorts International owns and operates hotels integrated with casinos and entertainment resorts. The company has a market capitalization of $17bn. The legalization of betting across the country would directly impact the shares of the company. MGM has launched its online betting platform BetMGM, which many see as changing the fortunes of the company. Shares of MGM have rallied 58% in the last three months.
Las Vegas Sands Corp. (NYSE: LVS)
Las Vegas Sands Corp. develops, owns, and operates hotels, casinos, and resorts in the United States. The company has a market capitalization of $40.1bn. The company suffered severe losses, which saw its revenue on an annualized basis decline by 67.1%. However, with its huge cash flow, investors see this as an undervalued opportunit. Shares of LVS have rallied by 3.6% in the last three months.
InterContinental Hotels Group (NYSE: IHG)
InterContinental Hotels Group owns, develops, manages, franchises, and leases hotels, restaurants, resorts, and spas globally. Though its hotels are known for their excellent corporate lodging service, Intercontinental is rebranded to make the brand appealing to younger lodgers. Shares of IHG have rallied by 25.3% in the last three months.
Expert tip on investing in hotel stocks
Given the current economic conditions, investing in hotel stocks requires a lot of patience. Hotel stocks may not make exponential strides as technology stocks do, but they definitely have the legs to run as conditions improve.
Why invest in hotel stocks?
Covid-19 put a substantial financial strain on the hotel industry. The dramatic drop in global travel and tourism left the industry scathed. However, despite this huge impact, there will always be a need for hotels
As normalcy slowly creeps in, hotel stocks would benefit from the reopening of the economy. People would want to make up for the time lost to the pandemic. This entails traveling and going on postponed vacations. Entertainment and leisure companies are reporting a surge in bookings for this summer vacation. This implies an uptick in the revenues of hotels, making hotel stocks a good buy given their relatively low price currently.
Frequently Asked Questions
MGM Hotels & Resorts has great potential.
Yes, the post-pandemic recovery would benefit the industry.
Marriott is in great shape financially.
Anyone of legal age can invest in hotel stocks
Marriott’s franchisor model makes it look stable for a sustainable cash flow.
The industry is important because it is one of those points in civilizations when cultures blend and people interact.