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 S&P 1500 Hotels Restaurants & Leisure Industry Index, which had a total return over the past year of 31.3%, as of Sept. 9, 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 S&P 1500 Hotel & Resort REITs Sub-Industry Index, which had a total return of 51.0% over the past year.

Hotel stocks have lagged the broader market over the past year while hotel REITs have outperformed. The broader equity market, as represented by the Russell 1000 index, provided a total return of 35.8% over the past 12 months, as of Sept. 9, 2021. All statistics in the tables below are as of Sept. 9. 2021.

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 impact 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
Hyatt Hotels Corp. (H) 72.14 7.3 3.8
Marriott International Inc. (MAR) 136.09 44.3 4.5
InterContinental Hotels Group PLC (IHG) 63.08 11.6 5.0

Source: YCharts

  • Hyatt Hotels Corp.: Hyatt Hotels is a multinational hospitality company that develops and manages branded hotels, resorts, and residential and vacation ownership properties. The company announced in mid-August that it has agreed to acquire Apple Leisure Group from KKR and KSL Capital Partners LLC for $2.7 billion. Apple Leisure Group is a luxury resort-management services, travel, and hospitality group. The transaction is expected to close by the end of 2021.
  • Marriott International Inc.: Marriott International owns and operates hotels, motels, and timeshare properties worldwide. The company announced in early August financial results for Q2 of its 2021 fiscal year (FY), ended June 30, 2021. Marriott International posted net income of $422 million, a significant turnaround from the net loss of $234 million reported in the year-ago quarter. Total revenue for the quarter rose 115.1% year over year (YOY). The company said that it saw an acceleration in the recovery of global lodging demand during the second quarter.
  • InterContinental Hotels Group PLC: InterContinental Hotels Group owns and operates hotel businesses worldwide. Its portfolio includes a diversified group of franchised hotels from established brands.

Fastest Growing Hotel Stocks

These are the hotel stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue through organic or new ways, as well as find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.

Fastest Growing Hotel Stocks
  Price ($) Market Cap ($B) Revenue Growth (%)
Hyatt Hotels Corp. (H) 72.14 7.3 165.2
Hilton Worldwide Holdings Inc. (HLT) 125.75 35.0 135.6
Marriott International Inc. (MAR) 136.09 44.3 115.1

Source: YCharts

  • Hyatt Hotels Corp.: See above for company description.
  • Hilton Worldwide Holdings Inc.: Hilton Worldwide Holdings is a holding company that, through its subsidiaries, provides hospitality services. It owns and manages hotels, resorts, and timeshare properties in various regions throughout the world. The company announced in late July financial results for Q2 FY 2021, the three-month period ended June 30, 2021. Hilton reported net income attributable to its stockholders of $130 million, a significant improvement from the net loss of $430 million in the year-ago quarter. Total revenue for the quarter rose 135.6% YOY. The company said that the results reflect the ongoing recovery from the pandemic as vaccine rollouts and the easing of travel restrictions help to revive demand for travel and tourism.
  • Marriott International Inc.: See above for company description.

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 (%)
Hilton Worldwide Holdings Inc. (HLT) 125.75 35.0 39.1
Wyndham Hotels & Resorts Inc. (WH) 71.32 6.7 37.1
Marriott International Inc. (MAR) 136.09 44.3 33.4
Russell 1000 N/A N/A 35.8
S&P 1500 Hotels Restaurants & Leisure Industry Index N/A N/A 31.3

Source: YCharts

  • Hilton Worldwide Holdings Inc.: See above for company description.
  • Wyndham Hotels & Resorts Inc.: Wyndham Hotels & Resorts owns and operates a hotel and resort chain. It offers resorts, meetings and events spaces, wedding venues, and more. The company announced in late July financial results for Q2 FY 2021, ended June 30, 2021. Wyndham Hotels & Resorts posted net income of $68 million, a significant turnaround from the $174 million net loss reported in the year-ago quarter. Net revenue rose 57.4% YOY. The company said that it continued to experience increasing demand from leisure and business travelers. Wyndham's board of directors also recently approved a 50% increase in the company's quarterly cash dividend beginning in the third quarter of 2021.
  • Marriott International Inc.: See above for company description.

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 ($) Market Cap ($B) 12-Month Trailing P/S Ratio
Ashford Hospitality Trust Inc. (AHT) 14.80 0.4 0.2
Service Properties Trust (SVC) 10.89 1.8 1.5
CorePoint Lodging Inc. (CPLG) 13.69 0.8 1.8

Source: YCharts

  • Ashford Hospitality Trust Inc.: Ashford Hospitality Trust is a REIT whose geographically diversified portfolio mainly consists of dominant branded, upper upscale, full-service and select-service hotels.
  • Service Properties Trust: Service Properties is a REIT that focuses on hotels and travel centers. Its hotels are primarily located in suburban markets near major metropolitan markets. The company also provides leasing and management services. The company announced in early August financial results for Q2 FY 2021, ended June 30, 2021. Its net loss widened to $91.1 million from $37.3 million in the year-ago quarter. Total revenue rose 74.9% YOY. The company said that despite continued headwinds related to the pandemic, hotel performance was steadily improving.
  • 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. The company announced in early August financial results for Q2 FY 2021, ended June 30, 2021. CorePoint posted net income of $28 million, a significant turnaround from a $107 million net loss in the year-ago quarter. Total revenue for the quarter increased 91.7% YOY. The company said that demand has increased this year compared to 2020, when the impact of the pandemic was more severe.

Fastest Growing Hotel REITs

These are the hotel REITs with the highest year-over-year (YOY) sales growth for the most recent quarter. As mentioned above, rising sales can help investors identify companies that are able to grow revenue through organic or new ways, as well as find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.

Fastest Growing Hotel REITs
  Price ($) Market Cap ($B) Revenue Growth (%)
Ryman Hospitality Properties Inc. (RHP) 77.79 4.3 1,060
Sunstone Hotel Investors Inc. (SHO) 11.93 2.6 1,020
Xenia Hotels & Resorts Inc. (XHR) 16.81 1.9 925.1

Source: YCharts

  • Ryman Hospitality Properties Inc.: Ryman Hospitality Properties is a REIT that owns and operates group-oriented, destination hotel properties in urban and resort markets. It specializes in upscale convention center resorts and country music entertainment experiences.
  • Sunstone Hotel Investors Inc.: Sunstone Hotel Investors is a lodging REIT that owns primarily upper scale hotels. Its hotels operate under various nationally recognized brand names. The company announced on Sept. 2 the appointment of Douglas M. Pasquale, the company's current chairman of the board of directors, as interim chief executive officer (CEO), effective immediately. Pasquale will be CEO until a permanent replacement can be found. He succeeds John Arabia, who leaves his position as president and CEO and resigns as a director of the company. The company did not provide a reason for Arabia's departure.
  • Xenia Hotels & Resorts Inc.: Xenia Hotels & Resorts is a REIT that owns a diversified portfolio of luxury and upper upscale hotels and resorts operated by major brands, including Marriott, Hyatt, Kimpton, Fairmont, Loews, and Hilton. The company announced in early August financial results for Q2 FY 2021, the three-month period ended June 30, 2021. Xenia's net loss attributable to its common stockholders narrowed to $42.0 million from $99.1 million in the year-ago quarter. Total revenue for the period expanded 925.1% YOY. The company said that its financial results were boosted by improving demand for lodging.

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 (%)
CorePoint Lodging Inc. (CPLG) 13.69 0.8 139.8
Ryman Hospitality Properties Inc. (RHP) 77.79 4.3 96.8
Xenia Hotels & Resorts Inc. (XHR) 16.81 1.9 88.5
Russell 1000 N/A N/A 35.8
S&P 1500 Hotel & Resort REITs Sub-Industry Index N/A N/A 51.0

Source: YCharts

  • CorePoint Lodging Inc.: See above for company description.
  • Ryman Hospitality Properties Inc.: See above for company description.
  • Xenia Hotels & Resorts Inc.: See above for company description.

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