Four hotel stocks buoyed by a recovering hospitality market

Although these names trade close to, or slightly under, their fair value estimates, a meaningful pullback could create an attractive entry point

Vikram Barhat 8 May, 2019 | 5:00PM
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As disruption of the hospitality industry deepens, the legacy hotel operators are gearing up to face their more nimble rivals head on. The recent move of the Marriott International Inc (MAR) into the home-rental space is a clear indication that leading players of the lodging industry are coming around to the concept of home–sharing, the hospitality sector’s hottest segment.

New technologies and entrants like Airbnb are upending the global travel industry, of which the US$500 billion hospitality industry is a key component. This is forcing traditional hotel operators to tweak their business models to make them more appealing to savvy millennial travellers.

By all accounts, though, the overall industry outlook remains cheery. According to a Zion Market Research report, the global hotels market is projected to grow from about US$148 billion in 2018 to nearly US$222 billion by 2026, growing at 4.6% annually. Rising disposable income, aspirational middle class, changing lifestyles and millennials’ preference for experiential travel, are expected to continue to drive growth for the hospitality industry.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Hilton Worldwide Holdings Inc135.90 USD1.05Rating
Hyatt Hotels Corp78.88 USD2.44Rating
Marriott International Inc Class A151.53 USD1.08Rating
Wyndham Hotels & Resorts Inc Ordinary Shares76.72 USD0.91Rating

About Author

Vikram Barhat

Vikram Barhat  Vikram Barhat is a Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry. He also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.

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