The hospitality and travel industry have seen some of the largest halts in economic activity due to the COVID-19 pandemic.
With international travel restrictions, travel has been limited to the bare minimum.
As with airlines and other travel companies, hotels have taken a large hit regarding their bookings.
However, countries around the world are starting to distribute COVID-19 vaccines.
International travelers cooped up in their homes will start to plan their first trips after a year-long hiatus.
The sector is gaining momentum again, and investors will want to be ready for the returns.
Check out our picks for the best hotel stocks that will help you to take advantage of the growth that’s likely to come.
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Best Hotel Stocks To Buy
Hilton Worldwide Holdings Inc. (NYSE: HLT)
Hilton Worldwide Holdings is an American multinational hospitality company.
They were founded in 1919 and holds a variety of hotels and resorts across 118 different countries and territories.
Hilton has 18 different brands across different market segments and owns a variety of properties on their own in addition to having a number of franchised locations.
In total, Hilton owned 983,465 rooms in June of 2020.
In February of 2016, Hilton announced that they would be turning their hotel holdings into a real estate investment trust.
This was a strong move for the company, and it really benefited their stock price.
Returns were consistently strong for four years until the pandemic hit.
As of April 2021, the company is worth $34.52 billion in market cap.
Much of the growth Hilton has seen has been a result of their growing customer loyalty campaigns.
They’ve also started a campaign to offer price matching if their customers find a better deal elsewhere.
Management has been an important part of the brand maintaining its reputation and presence.
Hilton stock has consistently performed well over the last year. Their most recent earnings report was less than ideal, but investors seem excited about a possible recovery.
Now could be a good time to buy and hold the stock until the travel sector fully recovers.
Hyatt Hotels Corporations (NYSE:H)
Sometimes referred to as Hyatt Hotels & Resorts, Hyatt Hotels Corporation is an American multinational hospitality company.
The company is based in Chicago and manages and franchises hotels, resorts, and vacation properties.
Hyatt was founded in 1957 with the purchase of the Hyatt House at Los Angeles international airport.
Since then, the company has expanded internationally, largely through the development of new properties and the acquisition of other hotel chains such as AmeriSuites and Summerfield Suites.
They have since expanded to servicing nearly 900 properties in over 60 countries with 20 different brand names.
The company currently has a market cap of $8.53 billion and has a portfolio spanning three main types of brands.
These include their timeless portfolio, or classic branded hotels, independent collections, or their soft-branded independent properties, and their boundless portfolio, or lifestyle brands.
While Hyatt stock initially struggled during the pandemic, their share price is finally starting to go up again.
Their stock price has gone up over 12 percent in the first three months of 2021.
The company posted their lowest revenue in a decade during 2020, but this is likely to improve in 2021 as travel restrictions ease.
Since Hyatt has a huge global portfolio, it may not take very long before they are profitable again.
Choice Hotels International, Inc. (NYSE:CHH)
Choice Hotels International is a Maryland-based hospitality franchisor and one of the largest hotel chains in the world.
Choice was founded in 1931 and owns a number of hotel brands ranging from economy to upscale locations.
The company has currently franchised over 7,000 properties across 41 countries and territories internationally.
Their entire portfolio includes nearly 600,000 rooms with tens of thousands currently under construction.
Choice Hotels has reached a $6.08 billion market cap despite a pretty significant drop in revenue for the 2020 year.
To get through the pandemic, the company offered special discounts to entice customers to travel.
As restrictions are slowly letting up, their bookings are increasing and their stock price has been going up as well.
Biggest Hotel Stocks
InterContinental Hotels Group (OTCMKTS: ICHGF)
As the first international company on our list, Intercontinental Hotel Group is based in England.
This multinational hospitality company owns nearly 900,000 rooms across 100 different countries.
They have over 5,900 lodging properties span multiple brands including InterContinental, Regent Hotels, Holiday Inn, Candlewood Suites, and Crowne Plaza.
InterContinental Hotels Group has a very diverse selection of properties and locations.
This has helped them fare well despite the challenges of the pandemic, because their overall value won’t drop even if one property struggles.
This stock has delivered very strong returns in the past year, and they’ve also maintained a dividend yield of 1.77%.
Wyndham Hotels & Resorts, Inc. (NYSE:WH)
Self-described as the largest hotel franchise in the world, Wyndham Hotels & Resorts is based out of New Jersey.
The company owns a portfolio of 9,280 locations. T
his impressive collection of hospitality properties spans across 20 owned hotel brands.
Wyndham’s hotels include Days Inn, Ramada, Baymont, Super 8, Howard Johnson, and more. They were also a spinoff created in 2018 by Wyndham Worldwide.
Wyndham Hotels currently has a market cap of $6.74 billion. While their stock price took a hit in March 2020, they have since fully recovered.
They are now trading at a price that’s higher than their initial IPO in 2018.
Their CEO also recently reported their highest occupancy levels since the pandemic began.
Marriott International, Inc. (NASDAQ:MAR)
In terms of the number of rooms owned, Marriott International tops the list.
With more than 1,400,693 available rooms, Marriott owns 30 brands across 7,484 properties.
With family-owned and operated management founded in 1927, this Maryland-based multinational American hospitality brand owns a large portfolio of hotels and related lodging facilities.
The company has a market cap of $48.34 billion.
Some of the most iconic brand names in the Marriott portfolio include JW Marriott Hotels, The Ritz-Carlton, St.
Regis Hotels and Resorts, and a number of other brands across several price ranges and specialty categorizations.
This company runs large properties that each have huge numbers of rooms, so they were hit particularly hard by COVID.
However, high-quality management and customer loyalty will likely continue to carry the brand into success in the future.
After struggling for roughly six months last year, this stock finally had a breakthrough in October 2020.
Their stock price has been consistently improving since then. They currently have a dividend yield of 1.29% as well.
They recently indicated that they would be testing contactless check-in and other contactless amenities at their properties, which could help travelers feel more comfortable when hotels open again.
Best Hotel Penny Stocks
Trivago NV (NASDAQ:TRVG)
This is the first hotel stock on our list that does not own hotel properties.
Trivago is a German transactional platform company with technology services specializing in the hotel, lodge, and metasearch field.
The platform Trivago provides allows users to search hotel prices across 1.3 million hotels in 190 countries.
Users are able to browse a wide selection of hotels and rooms and make a selection of the cheapest option.
Competition from similar sites has made it difficult for Trivago to pull ahead on the market.
While their share prices started off strong after their IPO in 2016, they quickly declined.
However, the company continues to improve its usability software for hotel listers to use.
They continue to innovate, with the aim of pulling back a large share of the market.
As a result, their share price has improved significantly over the past few months, and is now trading for over $4 per share.
Now has never been a better time to invest in Trivago.
As more people start traveling again, it’s likely that more people will start booking through this site again.
Hotel Stocks To Watch
Huazhu Group Ltd. (NASDAQ: HTHT)
Huazhu Group is a Chinese hotel company based in Shanghai.
They own several different hotel brands throughout China.
Most of their brands are upscale or mid-range, although they do have some economy brands as well.
COVID-19 hit China before the rest of the world, which means that they have also started to recover before the rest of the world.
While international travel is still limited, domestic travel is starting to pick up within China.
Huazhu Group has had some of the most solid revenue growth of any stock in the hotel sector in 2021.
This has been reflected in their share price, as they have had very strong returns year over year.
This stock also hit a five-year high point in February.
This stock is an interesting pick for anyone who wants to invest in the Chinese hotel market.
As the Chinese economy grows, it’s likely that tourism will increase as well, which bodes well for this stock.
Should I Buy Hotel Stocks?
Similar to the airline industry, Covid-19 has been relentless in putting a financial strain on the hospitality industry.
Since global travel has decreased dramatically, it’s astonishing that many hotel companies have been able to return to their pre-pandemic share levels.
Despite the huge hit to the lodging industry, there will always be a need for hotels.
As the world begins to open back up after so many months of isolation, hotels and travel stocks will likely skyrocket.
After taking the vaccine, people will want to see friends and family that they haven’t seen in months.
Avid travelers will also opt to resume their regular work and leisure travel.
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Hotel Stocks: Final Thoughts
Travel may be paused at the moment. As our world rolls out the vaccine and slowly relaxes travel restrictions, the hotel economy is likely to boom.
Adding some undervalued hotel stocks to your portfolio can help to give your portfolio the edge it needs to perform impeccably in the coming months of 2021.