Tag: travel

Investing in Comfort: Top Hotel Stocks for Your Portfolio

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:

  1. 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.
CompanyCompany SymbolPrice to BookPEGPEPrice to SalesForward PEYield
Choice Hotels International, Inc.CHH829.293.7624.243.5316.61.02%
Hyatt Hotels CorporationH4.081.2522.92.0734.390.41%
Hilton Worldwide Holdings IncHLTNA2.7843.684.7724.390.31%
Marriott International, Inc.MARNA3.5923.862.7421.450.88%
Wyndham Hotels & Resorts IncWH8.519.1924.944.0815.082.09%

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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Top Travel Stocks Short Squeeze Plays

by Fred Fuld III

Many stocks in the travel industry have suffered during the last three years due to the COVID pandemic. Some have lost over 50% of their value since 2019. As the market prices for these stocks have dropped so much, now might be the time to look for short squeeze opportunities.

Here is a quick review about the short squeeze and its terminology. When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.

Short selling can be profitable, but sometimes when the stock moves against the short sellers, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.

Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:

Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.

Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.

Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.

Check out the following list, but be aware, that often some stocks are heavily shorted for a reason. All these stocks have significant short metrics, but they have very low market caps and floats.

Company Symbol Days to Cover % of Float Shorted
Carnival Corporation & plc CCL 2 10%
Expedia Group, Inc. EXPE 2.9 5%
Lindblad Expeditions Holdings, Inc. LIND 23.9 19%
Norwegian Cruise Line Holdings Ltd. NCLH 1.6 10%
Royal Caribbean Cruises Ltd. RCL 2.9 6%
TripAdvisor, Inc. TRIP 4 12%

So as an example, Carnival has 10% of the float shorted, and it will take two days for the short sellers to cover their positions, based on the average daily volume.

Obviously, there is no guarantee that these stocks will go up, but if I was short any stock, I wouldn’t want to waste any time covering my position if the stock started to move up sharply, before all the other short sellers clamor in and drive the price way up.

Disclosure: Author has a short and long option position in CCL.

Speed Through Security During Your Summer Travel

by Fred Fuld III

If you haven’t already, you are probably planning your summer travel. However, there is something else you should plan on, one or more of the services available to travelers to help them get though security faster.

There are a few options available to you. One service, that gets to you the front of the security line is called CLEAR. This service has been around since 2010 and is available in more than two dozen airports, everywhere from Atlanta and Austin to Los Angeles and San Francisco to New York and Washington DC.

In addition to being escorted to the front of the line by a CLEAR representative, the company utilizes another feature to speed things up. Biometrics, such as your fingerprints and eyes are used to check your identity, so you don’t have to fumble around with a card.

I have used CLEAR and became an affiliate as it has saved me a ton of time at the airport. CLEAR has one other big advantage. It can be used at stadiums and other venues, such as Oracle Park, Madison Square Garden, and Yankee Stadium.

The cost of  CLEAR is $179 per year, and if you have kids under 18, they can accompany you for free. You can add a spouse for only $50.

An additional option is TSA PreCheck which is available in most airports across the United States. This allows you to avoid taking off your shoes and your jacket, and you don’t have to take your laptop out of your bag. The service is primarily for domestic’s flights.

The cost for PreCheck is $85 for five years. Children 12 and under are free if traveling with you, but kids 13 to 18 will require a separate registration. Some airline will PreCheck you for free; check with your airline.

For international travelers, the Global Entry program is available, with includes the same benefits as PreCheck but also allows you to return to the US through customs much faster. The price is $100 and children need their own pass The service is available in about a third of the PreCheck airports.

Happy travels!