Top Hotel Stocks to Add to Your Portfolio (2020)
Hotel stocks have been hit hard in the coronavirus pandemic as business trips, sports events and tourism in general have all been halted.
Much of the hotel stocks space is trading at a discount as investors have adopted a wait and see attitude for travel stocks due to the coronavirus.
Willing to take the risk and buy hotel stocks?
Investors willing to take the risk of further disruptions from the coronavirus pandemic should read carefully and buy in batches to avoid any large pullbacks that another lockdown might present.
As the economy starts up and recovers, top hotel stocks could be a good bet
After all, travel and hotel stocks staged a spectacular come back after the 2008 financial crisis. Should the story repeat itself, some hotel and travel stocks could skyrocket 1000%+.
But, until a vaccine is available, perhaps buy one of these Top Covid-19 Vaccine Stocks, the risk of coronavirus still looms over the market.
Not yet ready for hotel stocks?
We’ve created other stock lists such as Top 5 Online Payment Stocks and Top 3 Retail Stocks to Buy During the Reopening if you don’t have the appetite for travel related stocks that you might find interesting. You could also take a look at the fun Kids’ Top Stock Picks Challenge we made for a change of pace.
Is Airbnb the future of travel stocks?
Airbnb was getting ready for their IPO, but then COVID-19 changed all plans. Investors are still watching closely to see how this plans 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.
Top 15 Hotel and Travel Stocks to Buy in 2020
🏢Top 3 Canada Hotel and Travel Stocks
Are there hotel and travel stocks in Canada? There once were a few Canadian hotel stocks, like Temple Hotels (TPH-T), but they have been privatized. What’s left are not pure hotel stocks, but travel stocks like Air Canada or Transat A.T., a Casino Stock and some hotel-focused REIT.
American Hotel Income Properties (HOT.UN-T)
American Hotel Properties owns 79 hotels in cities like Pittsburgh, Tampa, and Baltimore (secondary US cities). They’ve upgraded old hotels, many on railway lines.
Hotels are typically the first sector to go down in a downturn and the first to come out. Today there is zero visibility, however. He would move on from this one.
Transat A.T. Inc (A) (TRZ.T)
Will the Air Canada purchase happen? The agreed price to buy Transat was $18 a share, today it’s trading below $6.50. Its CEO recently stated Air Transat would survive wether the Air Canada deal happens or not.
Allan Tong’s Discover Picks Air Transat is less desirable. Not exactly beloved by Canadian consumers, Transat isn’t receiving much affection from investors either. Last week, CIBC lowered its target on the hapless airline from $4.00 to $3.00 to underperform. Currently, there are three sells and one hold, with a $3.48 price target that is about…
Great Canadian Gaming (GC-T)
Great Canadian Gaming operates an entertainment, casino-hotel model that has been hit hard by the coronavirus pandemic. If you’re looking for Canadian hotel stocks, it might be an interesting alternative to the big Las Vegas brands. No need to search further for Casino Stocks Canada, Great Canadian Gaming is THE Canadian casino stock to buy in 2020.
It's being acquired now, so there's little juice to squeeze here. The market is assuming the deal will happen. He owns Evolution Gaming (Swedish) instead, which operates the software for online gaming (EVO is the ticker).
🏢 Top 12 US/International Hotels and Casino Stocks
In the US, Las Vegas reopened and people showed up…
But it seems they are also seeing record numbers of coronavirus infections two weeks after casinos reopened. Will they have to shutdown again? Many of the top US hotel stocks are big Las Vegas names.
Hyatt Hotels (H-N)
A luxury hotel and resort franchise that offer high-end lodging for discerning travelers. 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%.
Luxury hotels. The stock has flatlined due to worries over the coronavirus. They are selling their hotels for management contracts. They are using the cash to buy back stocks. He sees it trading over $100. A well-run business with the family having a lot of stocks. (Analysts’ price target is $86.13)
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.
If the Omicron variant does not slow down the economy and the market snaps back, then buy... Wait for the first Omicron case in the US to buy a good entry point.
LVMH (Owns Belmond Hotels) (LVMUY-OTC)
LVMH bought Belmond in 2018, 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. It’s not a pure hotel stock, but maybe a way to capitalize on the recovery with less risk.
World's largest luxury group. Well known brands with enduring pricing power. Great long-term prospects. Advantage of scale. Management has long-term track record of acquiring and growing brands. High margins. Expects revenue growth in high single digits, which means double digit EPS growth and good upside for the stock. Yield is 0.85%.
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.
They are splitting up before the end of the year into three separate companies: A REIT, Time share and hotels. His analysis sees this stock in the low $30s in a year just by unlocking value.
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.
Options moves: June 170s strike calls in Expedia. Investors believe that travel will pick up after Omicron passes. This stock was $162, and traders are buying $8 out of the money June 170s. He likes this trade, but he jumped in at a lower strike and will sell higher as we approach $170.
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.
Allan Tong’s Discover Picks Though BKNG pays no dividend and trades at 244x earnings, the stock boasts an operating margin of 13.6% and a profit margin of 4.06% while its ROE stands at 7.15%. That beats its rival Expedia at -9.39%, -10.65% and -59.16%. Further, stock performance has been encouraging with BKNG beating earnings in…
Las Vegas Sands Corp. (LVS-N)
A casino and resort operating company based in Paradise, Nevada. The reopening of the Las Vegas strip has gone relatively well. Bank of America estimates that Las Vegas Sands will endure the smallest drops in average room rates in the near term
Among the biggest losers on the S&P in 2021 #3, down 37%. It's a terrific casino operator with a huge operation in Macau. It's doubling down in China by selling its Vegas properties. But this suffers during Covid where in China has strong lockdown policies.
MGM Mirage (MGM-N)
A global hospitality and entertainment company with brands such as the Bellagio, MGM Grand, Mandalay Bay and The Mirage. Resorts are located in Las Vegas, New Jersey and Detroit among other destination locations, including Macau. They pay $0.52 of dividends per share. They also benefited from the reopening of Las Vegas and saw long lines of clients waiting to enter the casino.
Selling the Mirage He likes it. They're doing the right thing; they're getting more focused and have good managers. But tomorrow Wynn Resorts reports that will determine MGM's direction.
Wynn Resorts (WYNN-Q)
A high end hotel and casino operator based on the Las Vegas Strip. With the reopening of Vegas, major casino resorts saw strong initial demand. The city allowed for casinos to reopen on June 4th and saw long lines and packed flights. Wynne Resorts saw the highest average room rates on the strip during this time.
It's dead money, but he didn't foresee Omicron and beiking cracking down on Macau casinos. He beats himself up on owning this. He hopes someone takes this company out, which would be its only salvation.
Vail Resorts (MTN-N)
They are the largest ski resort operator in the US. Analysts are optimistic this will come out of the crisis better and bigger. It is a pretty good sport for social distancing. It has a great long-term outlook.
(A Top Pick Oct 04/19, Up 27%) As a tourism stock, he can't believe it's up so much. Has fly-in, but also drive-in, resorts. Unique geographical assets that no one can duplicate. They're not building any more mountains.
Hotels on a boat have been hit the hardest.
Royal Caribbean Cruises (RCL-N)
An American global cruise company based in Miami. It is the second largest cruise line operator in the world. The cruise operates under the brands Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises. The stock was hit hard by the coronavirus outbreak but has shown a modest recovery this week. The current yield is 4.49%.
Last year it bottomed at $10, but they just did a giant stock offering at $91, based on predictions that will sail soon. A juggernaut. It's riding the current reopening rotation.
The world’s largest travel leisure company with over 100 vessels. They were hit hard after news of the virus spreading on their ships broke news early in the pandemic. They raised $6 billion at the end of April so they have the capital to ride it out.
It's partially a reopening play. They issued a lot of debt and shares to endure Covid. The cruise business is slow to recover, too. Not interested in CCL, because they doubled their debt and outstanding shares.