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Investing in hotel stocks

Shifting travel patterns have thrown this industry into flux — a potentially lucrative opportunity for investors.

Updated

Apr 9, 2021

Fact checked

Hotel stocks tend to perform well in bull markets but the recent COVID-19 pandemic put a major strain on the hotel industry and hospitality sector. As vaccines continue to roll out, investors have the opportunity to get in on hotel stocks as they begin their slow climb to recovery.

What are hotel stocks?

The hotel industry includes motels, hotels and other short-term lodging facilities that span the globe. Hotel investments typically fall into two categories: C-corporation hotels and hotel real estate investment trusts (REITS).
C-corporation hotels focus on the management and marketing of hotels rather than the real estate or physical structure. Hotel REITs are companies that own the real estate that hotels occupy. Hotel REITs generally focus on the management of real estate and the acquisition of more.
Hotel stocks and hotel REITs are listed on major exchanges. You can purchase individual shares of either. Both are part of the wider hospitality industry.

Why invest in hotel stocks?

Whether you’re traveling for business or pleasure, you’ll probably need a hotel. These can range from simple motels to high-end hotels and resorts.
Politicians and diplomats must travel the world to entertain their fans across the globe. So investors can see hotel stocks as lucrative investments over the longer term.
The movement of people and services is essential to any strong economy, which is why hotels tend to perform well in bull markets.

Risks of investing in hotels

The hotel industry is susceptible to changes in travel patterns and the performance of surrounding attractions. Changes here can lead to major volatility. And we saw this in action during the COVID-19 pandemic and its economic fallout.
As social distancing rules and travel restrictions were put into place to quell the virus, many people stopped traveling. Attractions that supported the hospitality sector and its influx of people came to a halt — and the industry suffered. The hotel occupancy rate in Europe in May 2020 was 13.3%: an 82.3% drop compared to the previous year.
The coronavirus pandemic demonstrated that hotel stocks are not immune to risk. As the vaccine rollout continues to ramp up around the globe, the forecast is bright for hotel stocks — but there’s no guaranteed timeline of how long this sector will take to fully recover.

Hotel stocks

If you’re interested in hotel stocks, you have plenty of options. See how the following stocks are performing, and view details like market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield.

Company summary
Wyndham Hotels & Resorts, Inc. operates as a hotel franchisor worldwide. It operates through Hotel Franchising and Hotel Management segments. The Hotel Franchising segment licenses its lodging brands and provides related services to third-party hotel owners and others. The Hotel Management segment provides hotel management services for full-service hotels. It is also involved in the reward loyalty program business. The company's hotel brand portfolios include Super 8, Days Inn, Travelodge, Microtel, Howard Johnson, La Quinta, Ramada, Baymont, AmericInn, Wingate, Wyndham Alltra, Wyndham Garden, Ramada Encore, Hawthorn, Trademark Collection, TRYP, Wyndham, Wyndham Grand, Dazzler, Esplendor, Dolce, Vienna House, and Registry Collection. It operates a hotel portfolio of 24 hotel brands with affiliated hotels located in approximately 95 countries. The company was incorporated in 2017 and is headquartered in Parsippany, New Jersey.
Historical performance
Stock information
- Market capitalization: $6488450560
- P/E ratio: 22.7355
- PEG ratio: 2.1335
- Dividend yield: 0.0179%
Get more detailed information and learn how to buy WH.US stock
Company summary
Hilton Worldwide Holdings Inc., a hospitality company, engages in managing, franchising, owning, and leasing hotels and resorts. It operates through two segments, Management and Franchise, and Ownership. The company engages in the hotel management and licensing of its brands. It operates luxury hotels under the Waldorf Astoria Hotels & Resorts, LXR Hotels & Resorts, and Conrad Hotels & Resorts brand; lifestyle hotels under the Canopy by Hilton, Curio Collection by Hilton, Tapestry Collection by Hilton, Tempo by Hilton, and Motto by Hilton brand; full service hotels under the Signia by Hilton, Hilton Hotels & Resorts, and DoubleTree by Hilton brand; service hotels under the Hilton Garden Inn, Hampton by Hilton, and Tru by Hilton brand; all-suite hotels under the Embassy Suites by Hilton, Homewood Suites by Hilton, and Home2 Suites by Hilton brand; and premium economy hotel under the Spark by Hilton brand, as well as Hilton Grand Vacations. The company operates in North America, South America, and Central America, including various Caribbean nations; Europe, the Middle East, and Africa; and the Asia Pacific. The company was founded in 1919 and is headquartered in McLean, Virginia.
Historical performance
Stock information
- Market capitalization: $43997413376
- P/E ratio: 34.5907
- PEG ratio: 1.2135
- Dividend yield: 0.0035%
Get more detailed information and learn how to buy HLT.US stock
Company summary
Marriott International, Inc. operates, franchises, and licenses hotel, residential, timeshare, and other lodging properties worldwide. The company operates through U.S. and Canada, and International segments. It operates its properties under the JW Marriott, The Ritz-Carlton, Ritz-Carlton Reserve, W Hotels, The Luxury Collection, St. Regis, EDITION, Bvlgari, Renaissance, Le Méridien, Marriott, Sheraton, Westin, Four Points, Delta Hotels by Marriott, Autograph Collection, Tribute Portfolio, Marriott Hotels, Marriott Executive Apartments, Marriott Vacation Club, Gaylord Hotels, Design Hotels, Courtyard, Residence Inn, Fairfield, SpringHill Suites, TownePlace Suites, Protea Hotels, Aloft Hotels, AC Hotels by Marriott, Element Hotels, and Moxy Hotels brand names. It operates properties under 30 brand names in 138 countries and territories. Marriott International, Inc. was founded in 1927 and is headquartered in Bethesda, Maryland.
Historical performance
Stock information
- Market capitalization: $61466578944
- P/E ratio: 22.1695
- PEG ratio: 1.4642
- Dividend yield: 0.0099%
Get more detailed information and learn how to buy MAR.US stock
Company summary
MGM Resorts International, through its subsidiaries, owns and operates casino, hotel, and entertainment resorts in the United States and Macau. The company operates through three segments: Las Vegas Strip Resorts, Regional Operations, and MGM China. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. The company's casino operations include slots and table games, as well as online sports betting and iGaming through BetMGM. Its customers include premium gaming customers; leisure and wholesale travel customers; business travelers; and group customers, including conventions, trade associations, and small meetings. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was incorporated in 1986 and is based in Las Vegas, Nevada.
Historical performance
Stock information
- Market capitalization: $14028882944
- P/E ratio: 13.7819
- PEG ratio: 4.1999
- Dividend yield: 0.0002%
Get more detailed information and learn how to buy MGM.US stock
Company summary
Choice Hotels International, Inc. together with its subsidiaries, operates as a hotel franchisor. The company operates through Hotel Franchising & Management and Other segments. It franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Clarion Pointe, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, WoodSpring Suites, Everhome Suites, Cambria Hotels, Ascend Hotel Collection, Radisson Blu, Radisson RED, Radisson, Park Plaza, Country Inn & Suites, Radisson Inn & Suites , Park Inn by Radisson, Radisson Individuals, and Radisson Collection. The company also develops and markets cloud-based property management software to non-franchised hoteliers. Choice Hotels International, Inc. was founded in 1939 and is headquartered in Rockville, Maryland. Choice Hotel International is based in Baltimore, Maryland.
Historical performance
Stock information
- Market capitalization: $5692477952
- P/E ratio: 20.449
- PEG ratio: 1.1897
- Dividend yield: 0.0102%
Get more detailed information and learn how to buy CHH.US stock

What ETFs track the hotel category?

Invest in a bundle of stocks by purchasing exchange-traded funds (ETFs). ETFs are diversified baskets of stocks that typically track a specific index. The ones that invest in hotel stocks are also built with stocks from companies in the wider travel and leisure industry. This includes airline stocks and cruise line stocks.
Here are some examples of ETFs that invest in this sector:

U.S. Global Jets ETF (JETS)
Invesco Dynamic Leisure and Entertainment ETF (PEJ)

ETFMG Travel Tech ETF (AWAY)
VanEck Vectors Gaming ETF (BJK)

Compare trading platforms

Before you begin buying hotel stocks, you’ll need a brokerage account. These can vary across platforms based on fees, investment minimums, types of securities and more. Compare your options.

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Bottom line

The hotel industry faced major challenges during the COVID-19 pandemic and for many months, the state of the industry looked bleak. But as vaccine rollout continues to gain momentum, the future looks promising for this sector. Investing now could result in profitability down the road. If you’re ready to invest, compare trading platforms.

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Javier Simon

Javier Simon is a freelance finance writer at Finder and a certified educator in personal finance (CEPF). He’s featured on NerdWallet, Bankrate, Yahoo Finance and Fox Business, where he’s shared his expertise on personal finance topics, such as investing, retirement planning, taxes, budgeting and savings. He has also covered breaking news, such as student loan forgiveness initiatives, the housing market and inflation’s impact on consumers’ wallets. His passion is turning complex financial concepts into actionable content that can help people improve their financial lives. Javier holds a bachelor’s degree in multimedia journalism from SUNY Plattsburgh.

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Investing in hotel stocks

Shifting travel patterns have thrown this industry into flux — a potentially lucrative opportunity for investors.

What are hotel stocks?

Why invest in hotel stocks?

Risks of investing in hotels

Hotel stocks

Wyndham Hotels-and-Resorts (WH.US)

Hilton Worldwide (HLT.US)

Marriott International (MAR.US)

MGM Resorts International (MGM.US)

Choice Hotels International (CHH.US)