Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Raise A Toast To These Hotel Stocks In 2020

By Zacks Investment ResearchStock MarketsJan 07, 2020 09:00PM ET
www.investing.com/analysis/raise-a-toast-to-these-hotel-stocks-in-2020-200497321
Raise A Toast To These Hotel Stocks In 2020
By Zacks Investment Research   |  Jan 07, 2020 09:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

The U.S. hotel industry may face an array of challenges in 2020. Visa (NYSE:V) restrictions will certainly make it difficult for international travelers to gain entry into the United States. Also, election-related uncertainty this year may affect demand. At the same time, apprehensions of a recession and saturation of some branded hoteliers add to the concerns.

But the U.S. economy continues to hold ground, displaying outstanding resilience. What’s more, consumer spending has increased significantly and consumers are now more confident about their well-being. These factors will certainly drive hotel demand this year.

The pace of U.S. economic expansion picked up in the third quarter of 2019. Per the Bureau of Economic Analysis, the economy grew at an annualized rate of 2.1% in the three months ended Sep 30, 2019, versus the initial estimate of 1.9% and 2% in the second quarter. And as consumer outlays remain healthy, led by record low unemployment rate, investors expect the economy to continue expanding this year.

Per the Commerce Department, consumer outlays increased 0.4% in November, its strongest gain since July. Government data showed that there were significant purchases of automobiles and trucks in the month, while spending on healthcare was pretty high. These indicate that households have enough spending capabilities to keep the economy expanding at a steady pace in the near term.

Last but not the least, American consumers were very confident about the state of the U.S. economy at the end of last year. The U.S. Conference Board’s index of consumer confidence continues to remain high, as it came in at 126.5 for December. In fact, November’s reading was raised from 125.5 to 126.8. Moreover, the index that shows how consumers feel about the economy right now rose 4.4 points to 170. But what made Americans feel so confident? It’s a strong labor market and the lowest level of The unemployment in a half-century.

Needless to say, tax cuts have been a blessing in disguise for the hotel industry. On an individual level, tax cuts will boost paychecks for many workers, resulting in higher discretionary income for leisure travel. This in turn will boost revenues for hoteliers. Major hotels, in the meantime, will advantage from the corporate tax cut and spend the surplus money on business development and growth in America.

The Average daily rate (ADR), in the meantime, is expected to increase to $131 by the end of 2020, representing an average yearly increase of 0.6%. The national hotel occupancy is anticipated to come in at a healthy 65.6% to 65.8% in 2020, per HVS consultants.

4 Solid Hotel Stocks to Keep an Eye On

It will, therefore, be prudent to watch out for fundamentally sound hotel stocks that can make the most of the bullish scenario. We have, thus, highlighted five hotel stocks that have the propensity to grow in the near term.

Marriott Vacations Worldwide Corporation (NYSE:VAC) develops, markets, sells, and manages vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Sheraton, Westin, Hyatt Residence Club brands, and Marriott Vacation Club Pulse brands. Strong revenue-building capacities, digital innovation and synergies from ILG acquisition are some of the major factors backing Marriott Vacations Worldwide.

The company currently sports a Zacks Rank #1 (Strong Buy). The company’s expected earnings growth rate for the current year is 35.7% versus the Hotels and Motels industry’s projected rise of 7.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hilton Worldwide Holdings Inc. (NYSE:HLT) owns, leases, manages, develops, and franchises hotels and resorts. It operates through two segments, Management and Franchise, and Ownership. Aggressive expansion strategies, industry-leading loyalty program coupled with an asset-light business model currently bode well for Hilton.

The company currently has a Zacks Rank #3 (Hold). The company’s expected earnings growth rate for the current year is nearly 38%.

Wyndham Hotels & Resorts, Inc. (NYSE:WH) operates as a hotel franchisor. The company licenses its hotel brands, including Super 8, Days Inn, Ramada, Microtel Inn & Suites, La Quinta and Wingate.

The company currently has a Zacks Rank #3. The company’s expected earnings growth rate for the current year is 20.7%.

InterContinental Hotels Group PLC (NYSE:IHG) owns, manages, franchises, and leases hotels in the Americas.

The company currently has a Zacks Rank #3. The company’s expected earnings growth rate for the current year is 12.1%.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>



Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis Report

Marriot Vacations Worldwide Corporation (VAC): Free Stock Analysis Report

Intercontinental Hotels Group (LON:IHG): Free Stock Analysis Report

Wyndham Hotels & Resorts Inc. (WH): Free Stock Analysis Report

Original post
Raise A Toast To These Hotel Stocks In 2020
 

Related Articles

Raise A Toast To These Hotel Stocks In 2020

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email