3 Hotel Stocks to Buy for a 2021 Rebound

The travel and hospitality industries have been among the hardest hit amid the global coronavirus pandemic. Closed borders, shelter-in-place orders, and a general fear of catching the highly contagious virus largely brought travel to a halt this year. However, headlines related to…

the FDA’s emergency use authorization of the Pfizer-BioNTech COVID-19 Vaccine have lifted hopes for the hospitality industry’s recovery next year.

Although it will take some time for vaccines to become available to all, the global economy should start realizing the impact of the vaccines by summer of 2021 as life returns to “normal.” There is little doubt that news headlines about vaccines will boost travelers’ confidence and gradually increase hotel demand. Hotels with appealing amenities could then see a high influx of patrons in 2021. As the global economy is on track to deliver 6.4% GDP growth in the coming year, the hospitality industry should see a decent recovery.

Marriott International, Inc. (MAR – Get Rating), Hilton Worldwide Holdings Inc. (HLT – Get Rating) and InterContinental Hotels Group PLC (IHG – Get Rating) are expected to recover faster than the others in the industry based on their strong fundamentals and market reach.

Marriott International, Inc. (MAR – Get Rating)

MAR, one of the largest hotel chains in the world, needs no introduction. The company operates in segments such as, North American Full-Service, North American Limited-Service, and Asia Pacific. It manages 30 brands with 7,484 properties in 131 countries and territories around the world.

On October 29, MAR and Grab, Southeast Asia’s leading super app, announced a partnership across multiple verticals including food delivery, advertising, loyalty and rewards, payment, and transport services. The collaboration will enable MAR to serve a growing pool of customers who are increasingly transacting online.

On October 2, MAR announced the opening of Batam Marriott Hotel Harbour Bay on Batam island, Indonesia. This hotel promises to reinvent for the better visitors’ hotel experience and sets the stage in the hotel industry through its signature service and facilities.

MAR’s revenue has increased 54% sequentially to $2.25 billion in the third quarter ended September 30, 2020. Net income rose 57.3% to $100 million, while adjusted EBITDA grew 436.1% sequentially to $327 million over the period.

The consensus EPS estimate of $2.47 for the next year indicates a 1276.2% improvement from the year-ago value. The consensus revenue estimate of $14.22 billion for the next year indicates a 31.7% growth from the same period last year. The stock has gained 38.8% over the past six months.

How does MAR stack up for the POWR Ratings?

A for Trade Grade

B for Buy & Hold Grade

B for Industry Rank

B for Overall POWR Rating.

The stock is ranked #5 of 15 stocks in the Travel – Hotels/Resorts industry.

Hilton Worldwide Holdings Inc. (HLT – Get Rating)

HLT is a hospitality company that manages, leases, and franchises hotels and resorts. The company operates through the two segments of Management and Franchise, and Ownership. It has approximately 6,100 properties with approximately 971,000 rooms in 119 countries and territories.

HLT recently marked a new milestone in the China market with the opening of…

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