Hotels typically see a significant boost in business during the summer months, primarily due to the favorable weather conditions. The warm temperatures and sunny days make it an ideal time for travel, encouraging people to take vacations. Destinations known for their beaches, outdoor activities, and scenic beauty become particularly popular, leading to higher occupancy rates in hotels.
Another key factor driving hotel business in the summer is the school break schedule. With children out of school, families are more likely to plan longer trips and vacations. This period allows families to travel together without the constraints of school schedules, resulting in a surge in bookings for family-friendly accommodations and resorts.
In addition to the weather and school breaks, summer is also a time for numerous events and festivals. Many cities and tourist spots host special events, concerts, and festivals during the summer, attracting even more visitors. Hotels benefit from this influx by offering special packages and promotions tied to these events, further increasing their occupancy and revenue.
The strong summer demand has positive implications for hotel stocks, making them a worthwhile investment. Hotel stocks have shown impressive performance, often outpacing broader market indices during peak travel seasons. This demonstrates the strong nature of the hospitality industry and its capacity to generate substantial returns for investors.
Listed below are the top five travel stocks:
- Choice Hotels International, Inc. (CHH) is one of the largest and most successful hotel franchises globally, currently franchising over 7,000 hotels. The company offers a wide range of accommodations, from upscale to economy, and under various brand names. Known for its franchise model, Choice Hotels continues to expand its footprint and enhance its services to cater to a diverse clientele, maintaining a significant presence in the hospitality industry.
- Hyatt Hotels Corporation (H), commonly known as Hyatt Hotels & Resorts, is a leading American multinational hospitality company headquartered in the Riverside Plaza area of Chicago. Established in 1957, Hyatt operates in the Travel and Leisure sector, offering a diverse range of accommodations from luxury to economy. The company became privately held by the Pritzker family in the late 1970s and early 1980s before going public again. Today, Hyatt is recognized for its family-oriented corporate culture, extensive portfolio of properties, and a strong presence in the global hospitality market, with revenues reaching $6.667 billion and employing around 51,000 people worldwide.
- Hilton Worldwide Holdings Inc. (HLT) is a leading global hospitality company renowned for its extensive portfolio of 23 world-class brands, including luxury, full-service, and extended-stay hotels. With more than 7,600 properties and nearly 1.2 million rooms across 119 countries and territories, Hilton has established itself as a dominant force in the lodging sector.
- Marriott International, Inc. (MAR) is a leading global hospitality company with nearly 8,700 hotel properties across 139 countries and territories. Marriott includes brands such as Ritz-Carlton, Sheraton, and Westin. The company is committed to delivering exceptional guest experiences through innovation, luxury, and high-quality service.
- Wyndham Hotels & Resorts, Inc. (WH) is the world’s largest hotel franchisor by the number of properties, with approximately 9,200 hotels across over 80 countries. Headquartered in Parsippany, New Jersey, Wyndham offers a diverse portfolio of hotel brands ranging from economy to upscale, including names such as Days Inn, Super 8, Ramada, and Wyndham Grand. Known for its comprehensive loyalty program and user-friendly amenities, Wyndham focuses on providing comfortable, accessible stays for both business and leisure travelers.
| Company | Company Symbol | Price to Book | PEG | PE | Price to Sales | Forward PE | Yield |
| Choice Hotels International, Inc. | CHH | 829.29 | 3.76 | 24.24 | 3.53 | 16.6 | 1.02% |
| Hyatt Hotels Corporation | H | 4.08 | 1.25 | 22.9 | 2.07 | 34.39 | 0.41% |
| Hilton Worldwide Holdings Inc | HLT | NA | 2.78 | 43.68 | 4.77 | 24.39 | 0.31% |
| Marriott International, Inc. | MAR | NA | 3.59 | 23.86 | 2.74 | 21.45 | 0.88% |
| Wyndham Hotels & Resorts Inc | WH | 8.5 | 19.19 | 24.94 | 4.08 | 15.08 | 2.09% |
During the summer months, hotels thrive thanks to a combination of factors. The pleasant weather, coupled with school breaks, events, and festivals, drives a surge in business. This seasonal demand not only benefits hotel operations but also has a positive impact on hotel stocks. Leading hotel chains such as Choice Hotels, Hyatt, Hilton, Marriott, and Wyndham capitalize on this demand with their extensive global presence, offering a diverse range of accommodations tailored to meet the needs of various travelers.
Disclosure: Author had no positions in any of the above at the time the article was written.
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