10th May 2022
Hotel stocks suffered a serious blow in 2020 with the outbreak of COVID-19, but for some investors, the crisis offered an opportunity to search for the best hotel stocks to buy — and hopefully profit from — while the market was low.
Others are considering if now is the time to join the travel stock bandwagon before the market fully recovers. Many hotel stocks are perking up, thanks to a combination of smart decision-making and the return of the travel trade.
The pandemic proved that travel is more than a luxury, with 94% of consumers saying that travel is important for their health1. Savvy hotel brands took advantage of that need to get away, transforming themselves into destinations by adding expanded wellness facilities, art galleries, and unique culinary experiences2.
By shifting marketing to a domestic audience, hotels were able to appeal to travelers long before governments reopened their borders, promoting the benefits of taking a break within your own city, without grappling with fluctuating border regulations.
Among the shared features of the best hotel stocks is an accelerated digital transformation that opens up data-driven insights into travelers preferences. Many are emphasizing work facilities to appeal to those contemplating an extended workation, while others are finding ways to attract more families, to compensate for the loss of the business traveler and conference trade.
The post-covid traveler places cleanliness at the top of their list of concerns, and hotels hastened to reassure them. Hotels are embracing tech-related hygiene innovations like advanced disinfection through UV-light bots, contactless check in, hotel apps that turn your smartphone into your room key3, and voice-operated heating and air conditioning systems4.
Hotels are also recognizing the need to offer flexible rescheduling and cancelation policies, to optimize pricing for different seasons of the year.
As we enter 2022, hotels are anticipating the return of international travelers, including those in more exotic locations that had to wait for travelers to regain their confidence in long-haul travel. Hotels are also poised to benefit from reunion travel, serving as a location for extended families and groups of friends to meet up after 2 years of separation.
A survey by the World Tourism Council (WTC) found that 85% of people who haven’t traveled since 2019 intend to visit another country in 20225. Expedia has dubbed 2022 the year of the GOAT — Greatest Of All Trips — because of the explosion of pent-up longing to visit far-flung places.6
As a result of these trends, many more retail investors are wondering how to identify the best hotel stocks to buy now. Although we can’t tell you which travel stocks will perform the best, we can share our favorite hotel stocks for 2022.
One alternative to trying to identify the best hotel stocks is to invest in a travel or hotel ETF. An ETF allows you to spread a single investment across a number of stocks, so that you can benefit from the rising market, or cushion some of the loss in a down market , without putting all your eggs into one basket.
CRUZ, Defiance’s travel ETF, has holdings in a number of promising airline, cruise line, and hotel stocks, offering you a more balanced way to invest in the reopening travel market. CRUZ seeks to track the BlueStar Global Hotels, Airlines, and Cruises Index, a rules-based weighted index of companies in hotel, air travel, and cruise industries. CRUZ has an expense ratio of 0.45% and is currently trading at $19.327.
Marriott is one of the largest hotel chains in the world, owning more than 30 brands such as Ritz-Carlton, Sheraton, Westin, and Courtyard Hotels. Marriott franchises the brand rather than owning properties, with a portfolio of over 7,600 properties in 133 countries and territories8.
Marriott saw share prices rise 180% from their crash in April 2020, climbing from $59 to $171 by January 20229. It announced a 120% rise in net income and 75.1% jump in revenue in Q3 FY 2021, compared to the same quarter in the previous year10. Marriott’s global presence, high brand recognition, and popular loyalty programs incline many analysts to support it as a “buy.”11
Marriott has a market cap of $48.31 billion, and is currently trading at $148.0612.
Hilton manages hotels, timeshares, and resorts across the world, with 6,400 hotel properties under 18 brands in 119 countries as part of its franchise operations13. Despite the pandemic, the chain added 120 new hotels inQ2 2021 and continued expanding into Asia14.
Although prices crashed in 2020 — stock prices plummeted from $113 in February 2020 to $55 in April 202015 — it regained its losses admirably. Shares surpassed their pre-COVID price by Q2 202116, and its Q3 FY 2021 net income rose to $241 million from $79 million in Q3 FY 2020, while revenue grew 87.5% YOY (year on year)17.
Hilton is currently trading at $129.09, with a market cap of $36.03 billion18.
Choice is a hotel franchising company that manages mostly budget brands, with 7,100 franchises in over 40 countries and territories19.
It saw revenues evaporate in 2020, but the situation improved in 2021. Q3 FY 2021 saw net income of $116.66 million, up 705% year-over-year; total revenues rising 53% year-over-year to $323.37 million; and EPS growing 700% from 1 year previously to $2.0820. Choice is considered to be well positioned for future growth, with Investopedia ranking it the best value and fastest growing hotel stock in 202221.
Choice has a market cap of $7.16 billion, and is currently trading at $128.8622.
Unlike the previous 3 stocks, Ryman is a hotel Real Estate Investment Trust (REIT). It owns and operates hotel real estate rather than brands — often the properties that are managed by some of the aforementioned hotel brand stocks.
Ryman owns a number of big-name resorts and locations, such as the Grand Ole Opry in Nashville, and holds many locations that are favorites for conferences and conventions. Motley Fool analyst Matt Frankel predicts that these events will come back big in 2022, which is why he’s betting on Ryman stock.23
Ryman has a market cap of $4.52 billion and is currently trading at $82.0124.
For current performance and holdings, please visit defianceetfs.com/CRUZ
1 “Travel in 2022: what trends are the experts seeing?” November 29, 2021 https://www.thetimes.co.uk/travel/holiday-types/advice/travel-in-2022-what-trends-are-the-experts-seeing
2 “Travel in 2022: what trends are the experts seeing?” November 29, 2021 https://www.thetimes.co.uk/travel/holiday-types/advice/travel-in-2022-what-trends-are-the-experts-seeing
3 “Hilton Guests Can Now Open Their Door Via Their Smartphone” August 13, 2015 https://www.travelpulse.com/news/hotels-and-resorts/hilton-guests-can-now-open-their-door-via-their-smartphone.html
4 “Hotels will never be the same” June 25, 2021 https://www.vox.com/the-goods/22543924/hotels-qr-codes-contactless-check-in-robots-chatbots-sanitation
5 “Travel trends we should expect in 2022” December 23, 2021 https://www.traveldailymedia.com/travel-trends-we-should-expect-in-2022/
6 “The GOAT mindset: Expedia reveals 2022’s biggest travel trend” November 30, 2021 https://www.prnewswire.com/news-releases/the-goat-mindset-expedia-reveals-2022s-biggest-travel-trend-301433866.html
9 “Buy Hotel Stocks – 5 Best Hotel Stocks To Buy Right Now In 2022” January 4, 2022 https://www.economywatch.com/stocks/buy-stocks/hotel-stocks
10 “Top Hotel Stocks for Q1 2022” January 10, 2022 https://www.investopedia.com/top-hotel-stocks-5078914
11 “Investing in Travel and Tourism Stocks” February 9, 2022 https://www.fool.com/investing/stock-market/market-sectors/consumer-discretionary/travel-stocks/
14 “Top 5 Hotel Stocks To Watch Out In 2022” December 15, 2021 https://www.juststartinvesting.com/top-5-hotel-stocks/
15 “Buy Hotel Stocks – 5 Best Hotel Stocks To Buy Right Now In 2022” January 4, 2022 https://www.economywatch.com/stocks/buy-stocks/hotel-stocks
16 Accessed March 7, 2022 https://www.google.com/search?q=hilton+stock+price&ei=s2MnYsWBIsmaa93InJAB&oq=marriott+stock+price&gs_lcp=Cgdnd3Mtd2l6EAEYADIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQsAMQQzIHCAAQsAMQQ0oECEEYAEoECEYYAFAAWABgugloAnABeACAAQCIAQCSAQCYAQDIAQrAAQE&sclient=gws-wiz
17 “Top Hotel Stocks for Q1 2022” January 10, 2022 https://www.investopedia.com/top-hotel-stocks-5078914
18 Accessed March 7, 2022 https://www.google.com/search?q=hilton+stock+price&ei=s2MnYsWBIsmaa93InJAB&oq=marriott+stock+price&gs_lcp=Cgdnd3Mtd2l6EAEYADIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQRxCwAzIHCAAQsAMQQzIHCAAQsAMQQ0oECEEYAEoECEYYAFAAWABgugloAnABeACAAQCIAQCSAQCYAQDIAQrAAQE&sclient=gws-wiz
19 “Top Hotel Stocks for Q1 2022” January 10, 2022 https://www.investopedia.com/top-hotel-stocks-5078914
20 “Buy Hotel Stocks – 5 Best Hotel Stocks To Buy Right Now In 2022” January 4, 2022 https://www.economywatch.com/stocks/buy-stocks/hotel-stocks
21 “Top Hotel Stocks for Q1 2022” January 10, 2022 https://www.investopedia.com/top-hotel-stocks-5078914
22 Accessed March 7, 2022 https://www.google.com/search?q=choice+stock+price&ei=32UnYqmkGYGC9u8PjrSi-AY&oq=cjoicestock+price&gs_lcp=Cgdnd3Mtd2l6EAMYADIECAAQDTIGCAAQDRAeMggIABANEAUQHjIICAAQDRAFEB4yCAgAEA0QBRAeMggIABANEAUQHjIICAAQDRAFEB4yCAgAEA0QBRAeMggIABANEAUQHjIICAAQDRAFEB46BwgAEEcQsAM6BwgAELADEEM6BggAEAcQHkoECEEYAEoECEYYAFD7CVi_DmCOGGgCcAF4AIABqwGIAaoHkgEDMC42mAEAoAEByAEKwAEB&sclient=gws-wiz
23 “Americans Want to Travel — Here Are 2 Great Hotel Stocks to Buy” January 27, 2022 https://www.fool.com/investing/2022/01/27/americans-want-to-travel-here-are-2-great-hotel-st/
24 Accessed March 7, 2022 https://www.google.com/search?q=ryman+hospitality+stock+price&ei=8W8nYv-KLYzSa7y8kpAB&ved=0ahUKEwi_x4mf5Lb2AhUM6RoKHTyeBBIQ4dUDCA8&uact=5&oq=ryman+hospitality+stock+price&gs_lcp=Cgdnd3Mtd2l6EAMyBggAEAcQHjIFCAAQgAQ6BwgAEEcQsANKBAhBGABKBAhGGABQjAZYvw5gpBNoAXABeACAAbYBiAGjDpIBBDAuMTKYAQCgAQHIAQjAAQE&sclient=gws-wiz