Summer is just around the corner and Canadians are already planning their vacation to far away lands, or for a quick road trip closeby. Regardless, we need places to stay when we’re on vacation. Airbnb is getting ready for their IPO and investors are watching closely how this plays out. Airbnb is particularly promising for investors as they have already proven that they are profitable, unlike Lyft or Uber. Though the startup has disrupted the hotel and lodging industry in real ways, there are still some very good companies operating in the sector.
Hotels have adapted to the changing climate by offering more tailored customer experiences and services that Airbnb can’t offer necessarily.
Here are the top 8 hotel and lodging stocks to buy in 2019.
Holloway Lodging (HLC-T)
A Canada-based operator of hotels across the country. Their focus is on acquiring and operating real estate. A focus on limited service lodging properties with a complimentary full-service hotel offering, distinguishes this hotel chain from others.
The question with this group is the Palmeroy portfolio that they bought. Paid above replacement costs and renovations haven't borne out as they thought they would. Management is internalizing that portfolio now. Looking for better results of this portfolio in Q2 and Q3.
Temple Hotels (TPH-T)
A real estate investment trust that owns hotels in the Canadian Prairies and the North. They are concentrated in the Fort McMurray area. If you bet on the Alberta economy being positioned to recover well, this could be a good opportunity.
(A Top Pick April 13/12. Up 7.83%.) Big exposure to Western Canada, particularly Fort McMurray but they are diversifying quickly. Has taken some profits but continues to hold a little bit.
A turn around story. Good management. A lot of cost cutting is still going on. Most costs are US$'s, but sales are in Cdn$'s, so a strong Cnd$ is good for them. Expects a share buy back.
Hyatt Hotels (H-N)
A luxury hotel and resort franchise that offer high-end lodging for discerning travellers. They are moving away from owning hotels and want to collect royalties from the franchise that they own. This project is expected to be complete in about 3-5 years, so it could just be the beginning of good growth. They have a cheaper valuation than Marriott and gives a yield of 0.9%.
They no longer want to own the hotel, they want to own the franchise and collect the royalties. In 3-5 years, they'll be 100% there. Has some of the best real estate and at a cheaper valuation than Marriott. Yield is 0.9%. (Analysts’ price target is $80.30)
Marriott International Inc. (MAR-Q)
The world’s largest hotel company has a broad offering of hotels and lodging facilities for every level of traveller. Their brands include the Ritz-Carlton, St. Regis, Sheraton, Delta Hotels and a host of others.
Has had tremendous performance. Not currently a “Buy”. He bought it because it was a market leading company with a high dividend yield.
Belmond Hotels (BEL-N)
A global luxury hotel and resort that specialize in exotic locations. They also operate luxury tourist trains and river cruises. The company is well diversified and also operates a renowned restaurant in New York.
Hilton Worldwide Holdings (HLT-N)
The classic American multinational hospitality company. They launched another branch called Tru by Hilton that targets the millennial generation by offering a more tailored experience. Brands under them include Double Tree by Hilton, Waldorf astoria among other well known hotel chains.
An online travel company that operates several websites and search engines for flights and bookings. The company allows users to find competitive rates for hotels and flights. They are also well-fit to compete with Airbnb as they operate an online bookable vacation rental listing across the world.
Trading around 16X earnings. Recent numbers had some margin compression, partially caused by having a bunch of “marketing spend” because of going into a difficult period in travel. Thinks this will come off and margins will increase. Great free cash flow yield of about 9%.
Booking Holdings Inc. (BKNG-Q)
An online travel and related services. Their portfolio includes Booking.com, KAYAK, and OpenTable amongst others. They provide other travel experiences through local partners. They changed their advertising approach that negatively affected their stock price but they have increased bookings and the stock price is expected to recover.
The PE is 38 times earnings and 22 times forward earnings. The optimal time to buy is September 25th with a sell date of April 30th. It should return 23.92% according to seasonal averages. This year it had a gap lower. It had a parabolic rise this year and so you expect that to alleviate.…
(Market Call Minute.) This is hanging in really well. They just put up some strong numbers. Yield and revenues have been quite good. Chart seems reasonably supportive from this point on.
Up 50% in the last year, in large part due to their new casinos in Macau, a massive growth area. Selling at a hefty valuation. They are lobbying against online gaming in the US. Not a cheap stock.
If you want to be in this space, he would be more for a Macau play directly. They are actually larger than Las Vegas now and growing faster. Las Vegas Sands (LVS-N) is a bigger player there. Gambling stocks are too unpredictable for him.