The hotel industry is focused on the provision of short-term lodging, including hotels and motels, as well as accommodation-related services. It's one segment within the broader hospitality, or leisure, industry. The hotel industry is split into two main categories of companies: C-corporation hotels, such as Marriott International Inc. (MAR) and Hilton Worldwide Holdings Inc. (HLT); and hotel real estate investment trusts (REITs), like DiamondRock Hospitality Co. (DRH) and Park Hotels & Resorts Inc. (PK).

The hotel industry has been severely affected by the COVID-19 pandemic and its resulting travel and dining restrictions, and other social-distancing rules.

C-corp hotels generally are engaged in hotel management, branding and marketing, and sometimes franchise licensing. They often own little real estate and their legal structure requires them to pay corporate taxes on dividends. These hotel stocks are best represented by the Dow Jones U.S. Hotels Index, which had a total return over the past year of 68.1%, as of March 15, 2021.

Hotel REITs, on the other hand, are companies that focus more on the acquisition, ownership, and operation of hotel real estate. Some REITs even manage the hotels they own. They are legally structured in a way that exempts them from paying taxes on distributed dividends, but they must distribute 90% of their taxable income to shareholders in order to be eligible as a REIT. These hotel REITs are best represented by the Dow Jones U.S. Hotel and Lodging REITs Index, which had a total return of 62.5% over the past year.

Both hotel stocks and hotel REITs, represented by their respective indexes, have outperformed the broader market over the past year with total returns above the Russell 1000's total return of 53.5%, as of March 15, 2021. All statistics in the tables below are as of March 15.

In the first half of this story we look at the top 3 hotel stocks with: the best value, the fastest growth, and the most momentum. In the second half, we examine the top 3 hotel REITs with: the best value, the fastest growth, and the most momentum. Because the hotel industry has suffered severely from the impacts of the COVID-19 pandemic this year, many companies have not been profitable. Thus, we use the price-to-sales ratio to determine the best value stocks and sales growth to determine the fastest growth stocks.

Best Value Hotel Stocks

These are the hotel stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business's value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The price-to-sales ratio shows how much you're paying for the stock for each dollar of sales generated.

Best Value Hotel Stocks

 
Price ($) Market Cap ($B) 12-Month Trailing P/S Ratio
Extended Stay America Inc. ( STAY) 19.21 3.4 3.3
Hyatt Hotels Corp. ( H) 89.06 9.0 4.4
Marriott International Inc. (MAR) 153.56 49.8 4.7

Source: YCharts

  • Extended Stay America Inc.: Extended Stay America owns and operates hotels and motels. Its accommodations offer guest rooms, dining services, on-site laundry, pools, fitness centers, and more. The company recently announced that it has agreed to be acquired by a 50/50 joint venture between funds managed by Blackstone Real Estate Partners and Starwood Capital Group for approximately $6 billion in cash. The deal includes Extended Stay America's paired-share REIT, ESH Hospitality Inc., and is expected to close in the second quarter of 2021.
  • Hyatt Hotels Corp.: Hyatt Hotels is a multinational hospitality company that develops and manages branded hotels, resorts, and residential and vacation ownership properties.
  • Marriott International Inc.: Marriott International owns and operates hotels, motels, and timeshare properties worldwide. The company announced in late February the appointment of Anthony Capuano as chief executive officer (CEO). Mr. Capuano previously served as group president, Global Development, Design and Operations Services. Marriott also appointed Stephanie Linnartz as the new president. Both appointments follow the unexpected passing of President and CEO Arne Sorenson on February 15, 2021.

Hotel Stocks With the Most Sales Growth or Least Sales Decline

These are the hotel stocks with the highest year-over-year (YOY) sales growth or lowest sales decline for the most recent quarter. A company’s ability to maintain sales in a difficult business environment can be a sign of good management and/or a strong business model.

Hotel Stocks With the Most Sales Growth or Least Sales Decline

 
Price ($) Market Value ($B) Revenue Growth (%)
Huazhu Group Ltd. ( HTHT) 58.01 18.6 4.8
Extended Stay America Inc. (STAY) 19.21 3.4 -8.8
Choice Hotels International Inc. ( CHH) 112.20 6.2 -27.9

Source: YCharts

  • Huazhu Group Ltd.: Huazhu Group is a China-based hotel management company that provides hotel leasing, hotel operation, and co-development services.
  • Extended Stay America Inc.: See above for company description.
  • Choice Hotels International Inc.: Choice Hotels International franchises lodging properties under brand names such as Comfort Inn, Comfort Suites, Quality and Econo Lodge. It also offers vacation rental properties, travel tips, and other services. The company announced in mid-February financial results for its 2020 fiscal year (FY), which ended December 31, 2020. Net income fell 66.2% as revenue declined 30.6%. Choice Hotels International's total occupancy rate across its properties fell to 45.6% in FY 2020 from 57.7% in the previous year, largely due to travel restrictions related to the pandemic.

Hotel Stocks with the Most Momentum

These are the hotel stocks that had the highest total return over the last 12 months.

Hotel Stocks with the Most Momentum

 
Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Extended Stay America Inc. (STAY) 19.21 3.4 178.7
Huazhu Group Ltd. (HTHT) 58.01 18.6 92.9
Wyndham Hotels & Resorts Inc. ( WH) 71.28 6.6 83.3
Russell 1000 N/A N/A 53.5
Dow Jones U.S. Hotels Index N/A N/A 68.1

Source: YCharts

  • Extended Stay America Inc.: See above for company description.
  • Huazhu Group Ltd.: See above for company description.
  • Wyndham Hotels & Resorts Inc.: Wyndham Hotels & Resorts owns and operates a hotel and resort chain. It offers amenities, resorts, meetings and events spaces, wedding venues, and more. The company announced on February 10 financial results for FY 2020, which ended December 31, 2020. Wyndham reported a net loss of $132 million compared to net income of $157 million in FY 2019. Net revenue for the year fell 36.7%. The company attributed much of the decline in revenue to temporary hotel closures and other impacts related to the pandemic.

Best Value Hotel REITs

These are the hotel REITs with the lowest 12-month trailing price-to-sales (P/S) ratio. As mentioned above, for companies in early stages of development or industries suffering from major shocks, the price-to-sales ratio can be substituted as a rough measure of a business's value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The price-to-sales ratio shows how much you're paying for the stock for each dollar of sales generated.

Best Value Hotel REITs

 
Price ($) Market Cap ($M) 12-Month Trailing P/S Ratio
CorePoint Lodging Inc. ( CPLG) 9.80 568.4 1.1
Service Properties Trust ( SVC) 13.65 2,250 1.8
Hersha Hospitality Trust ( HT) 12.82 498.0 2.8

Source: YCharts

  • CorePoint Lodging Inc.: CorePoint Lodging is a REIT focused on midscale and upper-midscale select service hotels. Its portfolio includes hotels located near employment centers, airports, and major travel thoroughfares.
  • Service Properties Trust: Service Properties is a REIT that focuses on hotels and travel centers. The company also provides leasing and management services. The company announced in late February financial results for FY 2020, which ended December 31, 2020. Service Properties reported a net loss of $311.4 million compared to net income of $259.8 million in FY 2019. Total revenue declined 45.4%. The company noted that it results continue to be affected by the pandemic.
  • Hersha Hospitality Trust: Hersha Hospitality is a REIT that owns and operates upscale and mid-scale limited service and extended-stay hotels located in established metropolitan markets. The company announced in late February financial results for FY 2020, which ended December 31, 2020. Hersha's net loss widened to $189.3 million from $5.8 million in the previous year. Total revenue declined 66.7%.

Hotel REITs With the Most Sales Growth or Least Sales Decline

These are the hotel REITs with the highest year-over-year (YOY) sales growth or lowest sales decline for the most recent quarter. As mentioned above, a company’s ability to maintain sales in a difficult business environment can be a sign of good management and/or a strong business model.

Hotel REITs With the Most Sales Growth or Least Sales Decline

 
Price ($) Market Cap ($B) Revenue Growth (%)
Four Corners Property Trust Inc. ( FCPT) 29.25 2.2 9.1
CorePoint Lodging Inc. (CPLG) 9.80 0.6 -50.2
Service Properties Trust (SVC) 13.65 2.3 -53.5

Source: YCharts

  • Four Corners Property Trust Inc.: Four Corners Property is a REIT that owns and leases properties for use by restaurants, food services, and related industries. The company announced in mid-February financial results for FY 2020, which ended December 31, 2020. Net income rose 6.3% as revenue grew 6.7%. Four Corners said that it experienced only a brief interruption to its business due to the pandemic during the year.
  • CorePoint Lodging Inc.: See above for company description.
  • Service Properties Trust: See above for company description.

Hotel REITs with the Most Momentum

These are the hotel REITs that had the highest total return over the last 12 months.

Hotel REITs with the Most Momentum

 
Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Park Hotels & Resorts Inc. (PK) 24.08 5.7 172.9
Hersha Hospitality Trust (HT) 12.82 0.5 141.0
Ryman Hospitality Properties Inc. ( RHP) 85.38 4.7 132.2
Russell 1000 N/A N/A 53.5
Dow Jones U.S. Hotel and Lodging REITs Index N/A N/A 62.5

Source: YCharts

  • Park Hotels & Resorts Inc.: Park Hotels & Resorts is a REIT that owns and operates hotels and resorts. Its properties offer a variety of services and amenities, including accommodation, dining, meeting and wedding rooms, spas, and fitness centers. The company announced in late February financial results for FY 2020, which ended December 31, 2020. Park Hotels & Resorts reported a net loss of $1.4 billion compared to net income of $316 million in FY 2019. Total revenue declined 70.0%. The company's pro-forma occupancy rate plummeted to 26.8% in FY 2020 from 82.3% in the previous year, reflecting the pandemic.
  • Hersha Hospitality Trust: See above for company description.
  • Ryman Hospitality Properties Inc.: Ryman Hospitality Properties is a REIT that owns and operates group-oriented, destination hotel properties in urban and resort markets.

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