Hotel stocks faced significant pressure during the 2020 Covid-19 pandemic as the world economy came to a screeching halt.
Investors began speculating if this was the end for the hotel industry as a whole.
Technology companies like Airbnb began to take market share, as work from home trends and shared living spaces gained more popularity.
The global pandemic certainly shifted how consumers viewed their travel experiences with family and friends.
However, in an economy with high inflation and high interest rates, consumers are almost always looking for the cheaper option.
In most cases, consumers are paying more for Airbnb travel experiences.
The global hotel and resort industry is currently valued at $1.06 trillion, down from $1.53 trillion in 2019 (Statista, 2023).
It is projected to reach $1.21 trillion by the end of 2023, slowing climbing its way back from the 2019 peak.
While the hotel industry is making a post-pandemic recovery, the industry still has a long way to go.
But the future remains optimistic, given the nascency of the short term rental market.
Below, we will analyze Airbnb vs. Hotels to discover which one is the cheaper option.
7 Best Hotel Stocks for 2023
- Hilton Worldwide
- Marriott International
- Hyatt Hotels Corporation
- InterContinental Hotels Group
- MGM Resorts International
- Wyndham Hotels & Resorts
- Booking Holdings
Airbnb Vs. Hotels
The Airbnb vs. Hotel comparison has been a long debated topic, especially in the midst of the 2020 Covid-19 global pandemic.
While some often give a black and white comparison, the differences are a lot more nuanced than some may realize.
The decision can be based in personal preferences and can often change on a whim when you consider a variety of different factors.
Some of the factors include the number of guests travelling, length of stay, location, rooms, amenities, fees and more.
Below we will give the Pros and Cons of Airbnb’s and Hotels to determine what option may be best for you.
Later, we will discover the 7 best hotel stocks to buy now for 2023!
Airbnb Pros & Cons
Pros
- Airbnb can be a better option for longer duration stays of 30 days or more.
- Better options for locations dependent upon the occasion or personal. preferences (I.e. close to a beach, close to shopping centers, close to grocery stores).
- Travellers can save money on food costs by cooking from their Airbnb locations. (I.e. more nutritious foods and less eating out)
- Can be more spacious and provide more comfortability.
- More privacy.
Cons
- Shorter stays are often more costly than hotels.
- More hands off and less feel of a customer experience.
- High cleaning fees can cut in significantly to overall cost of stay.
- Can cancel your stay on a short notice.
- No housekeeping every day, which can be a negative for travellers.
Hotels Pros & Cons
Pros
- Cheaper option for short term stays. (Typically under 2 weeks)
- Concierge service.
- Amenities which can include. (Pool, Hot tub, Sauna, and Bar)
- Cleanliness can be high dependent upon the hotel chosen.
- Breakfast may be included.
- Includes 24-hour reception.
Cons
- Longer stays can be more costly.
- Unable to cook your own meals.
- Generally less spacious, especially if you’re travelling as a big family.
- Less privacy.
What Is The Better Option?
When weighing the pros and cons of airbnb vs. hotels, there are a variety of different factors to consider.
This can include the number of travellers, length of stay, amenity preferences, locations, rooms, and overall space.
During the Covid-19 pandemic, consumers tend to shift their accommodation preferences as many began to work from home and travel abroad.
Generally for longer term stays, Airbnb end up being the cheaper options.
However, when you take into consideration the length of stay, hotels generally seem like the best value for your money.
Now with this in mind, let’s discover the 7 best hotel stocks to buy for 2023!
1. Hilton Worldwide (NYSE: HLT)
- Ticker: HLT
- Dividend Yield: 0.41%
- Market Cap: $39.34 Billion
Hilton Worldwide is an American multinational hospitality company headquartered in Tysons, Virginia, United States.
They were founded more than a century ago, when Conrad Hilton purchased his first 40-room hotel in Cisco, Texas. Now they have grown into one of the world’s largest hospitality brands.
Hilton Worldwide owns and operates 7,165 properties in 123 countries and territories.
This is through their 19 notable brands that you may be familiar which include Hilton Hotel & Resorts, Hilton Garden Inn, Double Tree, Hampton, Tru, and more.
The stock delivered a 12.64% CAGR in shareholder returns over the last decade.
Hilton Worldwide employs more than 155,000 people and has approximately $15.51 billion in total assets.
In 2022, the company had annual revenues of $8.77 Billion.
2. Marriott International (NASDAQ: MAR)
- Ticker: MAR
- Dividend Yield: 0.92%
- Market Cap: $53.87 Billion
Marriott International is an American multinational hospitality company headquartered in Bethesda, Maryland, United States.
They are the largest hotel chain and hospitality company in the world.
Marriott International owns and operates 8,000 properties, serving more than 1.4 Million rooms in 139 countries.
Some of their notable brands include Marriott, Courtyard, Weston, Four Points, Delta and St. Regis.
In April 1995, the company acquired a 49% ownership interest in The Ritz-Carlton Hotel Company, a luxury hotel chain.
The stock delivered a 10-Year total return of 362.35%, beating out the S&P 500’s 161.90%.
Marriott International employs more than 250,000 people and has approximately $24.81 billion in total assets.
In 2022, the company had annual revenues of $20.77 Billion.
3. Hyatt Hotels Corporation (NYSE: H)
- Ticker: H
- Dividend Yield: N/A
- Market Cap: $12.49 Billion
Hyatt Hotels Corporation is an American multinational hospitality company headquartered in Chicago, Illinois, United States.
Founded in 1957, the company grew through development and acquisitions over the last 7 decades.
Hyatt’s portfolio consists of 1,150 hotels and resorts in 70 countries.
In 2021, they made a significant acquisition of Apple Leisure Group (ALG), a luxury resort services company. They purchased the company from private equity firm KKR for $2.9 billion in cash.
ALG was the largest seller of chart flights in 2019 providing service to 3.2 million passengers. Primarily, they would market their service to U.S. customers travelling to the Caribbean, Mexico, Jamaica and the Dominican Republic.
Hyatt Hotels Corporation employs more than 180,000 people and has approximately $12.31 billion in total assets.
In 2022, the company had annual revenues of $5.89 Billion.
4. InterContinental Hotels Group (NYSE: IHG)
- Ticker: IHG
- Dividend Yield: 3.18%
- Market Cap: $12.14 Billion
InterContinental Hotels Group is a British multinational hospitality company headquartered in Windsor, England, United Kingdom.
They are one of the largest hotel chain companies in the world.
InterContinental Hotels owns and operates 6,164 hotels in more than 100 countries. This equates to approximately 911,627 rooms.
Some of their notable brands include Six Sense, Hotel Indigo, Regent, Holiday Inn, Holiday Inn Express, and Iberostar.
InterContinental Hotels Group employs more than 325,000 people and has approximately $4.21 billion in total assets.
In 2022, the company had annual revenues of $3.89 Billion.
5. MGM Resorts International (NYSE: MGM)
- Ticker: MGM
- Dividend Yield: 0.02%
- Market Cap: $16.73 Billion
MGM Resorts International is an American hospitality and entertainment company headquartered in Paradise, Nevada, United States.
They own and operate 31 luxury hotels and entertainment properties across the globe.
Known for operating resorts and casinos, the company shifted their business model now focusing more on mixed-use development projects.
Some of the company’s notable brands include the Bellagio, Aria, Luxor, Park MGM, The Cosmopolitan and Nomad.
The stock is up almost 35% YTD on the back of strong Q4 2022 earnings results.
MGM Resorts International employs more than 45,000 people and has approximately $45.69 billion in total assets.
In 2022, the company had annual revenues of $13.12 Billion.
6. Wyndham Hotels & Resorts (NYSE: WH)
- Ticker: WH
- Dividend Yield: 2.04%
- Market Cap: $5.94 Billion
Wyndham Hotels & Resorts is an American multinational hospitality company headquartered in Parsippany, New Jersey, United States.
They own and operate 9,200 hotels in more than 80 countries.
Some of their notable brands include Days Inn, Super8, Howard Johnson, Ramada, Wingate, and Wyndham.
The company spun off their hotel business in 2018, and the stock has delivered 6.08% to its shareholder since inception.
Wyndham Hotels & Resorts employs more than 2,500 people and has approximately $4.12 billion in total assets.
In 2022, the company had annual revenues of $1.49 Billion.
7. Booking Holdings (NASDAQ: BKNG)
- Ticker: BKNG
- Dividend Yield: N/A
- Market Cap: $101.17 Billion
Booking Holdings is an American travel fare aggregator, search engine and technology company headquartered in Norwalk, Connecticut, United States.
They are currently the largest travel company in the world by market capitalization.
In 2022, travelers booked 896 million room nights, 62 million rental car days, and 23 million airplane tickets through Booking Holdings subsidiaries.
Some of their notable brands include Booking.com, Priceline.com, Kayak.com, Cheapflights.com and Rentalcars.com.
In June 2014, the company acquired restaurant-reservation company Opentable in an all-cash deal worth an estimated $2.6 Billion.
Although they do not directly own hotel assets, they’re a staple in the hotel industry.
Their high ROE of 68.26% and monstrous free-cash flow make them well positioned to capitalized on the long term growth of the hospitality industry.
Booking Holdings employs more than 20,000 people and has approximately $25.36 billion in total assets.
In 2022, the company had annual revenues of $17.09 Billion.
Hotel Stocks: Is Now the Time to Buy?
The hotel business faced significant pressure in 2020, as the world economy was shut down during the Covid-19 global pandemic.
Airline stocks, hotel stocks and the travel industry as a whole were some of the hardest hit sectors.
As the economy battles with slowing growth and higher interest rates, a mild recession could be on the horizon.
This could cause a slowdown in the travel industry as a whole, affecting hotel stocks performance.
However, hotel stocks have recorded strong revenue and EPS growth in recent quarters, despite interest rates continuing to rise.
While the hospitality industry is highly cyclical, a fed pivot in 2024 could cause a boom in travel demand. This news alone could boost hotel stocks.
If you are considering investing in the industry, you might want to watch companies like Marriott International due to their global footprint, industry expertise and high profit margins.
You can also consider companies like Booking Holdings, whom derives a majority of its revenue through commissions with less overhead and industry volatility.
Disclosure: The author holds no position mentioned in this article. Freedom Stocks has a disclosure policy.
