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12 Best Hotel Stocks To Buy Now

In this article, we will discuss the 12 best hotel stocks to buy now. You can skip our comprehensive analysis of the hotel industry, and go directly to the 5 Best Hotel Stocks To Buy Now.

The hotel industry is a branch of the hospitality sector that focuses on offering lodging services to clients. According to Statista, the global market for hotels and resorts reached its peak in 2019 at $1.52 trillion. The coronavirus (COVID-19) pandemic caused the market size to fall under $1 trillion in 2020 and 2021. The market was anticipated to be worth $1.06 trillion in 2022. According to Deloitte, there is an indication that some consumers are still adjusting to COVID while there has been a welcome uptick in activity across the industry. Consumers are also highly concerned about inflation and the cost of living, but these worries have not yet had a significant impact on their intentions to spend money on travel.

According to CBRE, inbound tourism will increase hotel demand in 2022 in the U.S., driven primarily by leisure travelers from Europe and the Asia-Pacific region. In 2022, resorts and all-inclusive vacation spots will continue to do well as travelers look for simplicity and price stability. The advantages won’t all be the same. Miami has benefited from the change in travel habits and is already doing 13% better than 2019’s summer revenue per available room (RevPAR). Greater benefits may accrue in 2022 for harder-hit markets like San Francisco and New York, where RevPAR is still down 61% and 56%, respectively, from 2019. Given rising construction costs and manpower scarcity, supply growth will generally continue to be low.

For the Hotel sector in the U.S., PWC foresees a more robust Q4. According to Warren Marr, US Hospitality & Leisure Managing Director at PWC:

“Despite volatility in the financial markets and heightened concerns over the humanitarian crisis in Ukraine, we now expect US hotels to surpass 2019 RevPAR levels this year, driven by strong growth in room rates stemming from focused revenue management strategies of operators.”

Smart money is certainly invested in the hospitality industry, and companies like Marriott International, Inc. (NASDAQ:MAR), Hilton Worldwide Holdings Inc. (NYSE:HLT), and MGM Resorts International (NYSE:MGM) are some of the best hotel stocks that are very popular among hedge funds.

Zvonimir Atletic/Shutterstock.com

Our Methodology

Let’s dive into the 12 best hotel stocks to buy now. We took into account hedge fund sentiment, analysts’ ratings, long-term growth potential, and fundamentals while choosing these stocks. The stocks are ranked based on their popularity amongst the hedge funds.

Best Hotel Stocks To Buy Now

12. Marriott Vacations Worldwide Corporation (NYSE:VAC)

Number of Hedge Fund Holders as of Q2, 2022: 22

Marriott Vacations Worldwide Corporation was founded in 1984 and is based in Orlando, Florida. Marriott Vacations Worldwide Corporation (NYSE:VAC), a vacation company, develops, markets, sells, and manages vacation ownership and related products.

Out of the 895 hedge funds polled by Insider Monkey by the end of the second quarter of 2022, 22 held a stake in Marriott Vacations (NYSE:VAC), down from 25 funds in the preceding quarter. Richard Mashaal’s Rima Senvest Management was the leading shareholder of Marriott Vacations Worldwide Corporation (NYSE:VAC) as of Q2, holding 2.1 million of its shares worth $249.89 million. Investors have a good reason to be patient with the stock because of the company’s stellar dividend and repurchase history. On September 9, Marriott Vacations Worldwide Corporation (NYSE:VAC) declared a $0.62 per share quarterly dividend, in line with the previous. The dividend is payable on October 6 to shareholders of record on September 22. The stock has a forward dividend yield of 1.88% and a payout ratio of 27.13% as of October 6.

Baron Funds, an asset management company, released its “Baron Growth Fund” second quarter 2022 investor letter. Here is what Baron Funds specifically said about Marriott Vacations Worldwide Corporation (NYSE:VAC):

“Finally, timeshare leader Marriott Vacations Worldwide Corporation (NYSE:VAC) recently increased its outlook for new timeshare sales last month, boosted by very high occupancy, strong tour growth, and sustained spending per owner.”

11. Choice Hotels International, Inc. (NYSE:CHH)

Number of Hedge Fund Holders as of Q2, 2022: 22

Choice Hotels International, Inc. (NYSE:CHH) is a Rockville, Maryland-based operator of hotel chains globally that range from budget to premium options.

On September 15, Michael Bellisario, a Baird analyst, raised his price target for Choice Hotels International, Inc. (NYSE:CHH) from $129 to $133 while maintaining a Neutral rating on the stock. The analyst has a favorable opinion of the Radisson acquisition because it expands Choice’s portfolio and brings in additional higher RevPAR brands. Additionally, earnings projections are rising, given that the corporation used a sizable portion of its available investment capacity, including the repurchase of 1.6 million shares. The stock has a forward dividend yield of 0.82%. On September 9, Choice Hotels International, Inc. (NYSE:CHH) declared a $0.24 per share quarterly dividend, in line with the previous. The dividend is payable on October 14 to shareholders of record on October 3.

In the second quarter investor letter, Baron Funds discussed Choice Hotels International, Inc. (NYSE:CHH). Here is what the fund said:

“Shares of hotel franchisor Choice Hotels International, Inc. (NYSE:CHH) declined on investor concerns around a possible economic slowdown or recession. We retain conviction. Choice is not experiencing a slowdown in visitation or spend levels at its properties and continues to generate strong results. The company recently acquired the Radisson hotel brand in the Americas, an asset-light transaction that should add significantly to shareholder value.”

10. Wynn Resorts, Limited (NASDAQ:WYNN)

Number of Hedge Fund Holders as of Q2, 2022: 26

The company was founded in 2002 and is based in Las Vegas, Nevada. Wynn Resorts, Limited (NASDAQ:WYNN) designs, develops, and operates integrated resorts. At the end of the second quarter of 2022, 26 hedge funds in the database of Insider Monkey held stakes worth $142.8 million in Wynn Resorts, Limited (NASDAQ:WYNN), compared to 32 in the previous quarter worth $269 million. On September 26, Jefferies analyst David Katz upgraded Wynn Resorts, Limited (NASDAQ:WYNN) to Buy from Hold.

In its Q3 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks, and Wynn Resorts, Limited (NASDAQ:WYNN) was one of them. Here is what the fund said:

“In the most recent quarter, we exited the Fund’s holdings in Wynn Resorts, Limited (NASDAQ:WYNN) due to: (i) ongoing COVID-19-related travel restrictions in China, Macau, and Singapore; and (ii) the Macau government’s announcement to tighten its casino regulatory oversight.”

09. Hilton Grand Vacations Inc. (NYSE:HGV)

Number of Hedge Fund Holders as of Q2, 2022: 26

The U.S. company Hilton Grand Vacations Inc. (NYSE:HGV), which offers vacations and resorts, is based in Orlando, Florida. More than 300,000 members of the corporation use its reservation, membership, and other services, and it is best known for its Hilton Grand Vacations Club on the Las Vegas Strip.

Hilton Grand Vacations Inc. (NYSE:HGV) outlook has improved with its strong revenue growth and margin expansion. For Q2, 2022, Hilton Grand Vacations reported revenues of $948 million. In contrast, last year’s revenues were $334 million. Over the past four quarters, the company has exceeded consensus revenue projections three times.

Of the 895 hedge funds profiled by Insider Monkey for this year’s second quarter, 26 had held a stake in the company. Hilton Grand Vacations Inc. (NYSE:HGV)’s largest investor is Clifford A. Sosin’s CAS Investment Partners, which owns more than 7 million shares that are worth $276 million.

Along with Marriott International, Inc. (NASDAQ:MAR), Hilton Worldwide Holdings Inc. (NYSE:HLT), and MGM Resorts International (NYSE:MGM), Hilton Grand Vacations Inc. (NYSE:HGV) is one of the best hotel stocks to buy now.

08. Playa Hotels & Resorts N.V. (NASDAQ:PLYA)

Number of Hedge Fund Holders as of Q2, 2022: 26

Playa Hotels & Resorts N.V. (NASDAQ:PLYA) was founded in 2006 and is located in Fairfax, Virginia. Playa Hotels & Resorts N.V. (NASDAQ:PLYA), together with its subsidiaries, owns, builds, and manages resorts in prestigious coastal locations in Mexico and the Caribbean.

During Q2, Playa Hotels & Resorts N.V. (NASDAQ:PLYA) earnings and revenue both increased significantly. For Q2, 2022, the company posted an EPS of $0.15, beating estimates by $0.05, and revenue of $221.27 million, beating expectations by $16.26 million. During Q2, Playa Hotels & Resorts N.V. (NASDAQ:PLYA) improved its cash position as compared to total liabilities. Playa Hotels & Resorts N.V. (NASDAQ:PLYA) managed to reduce its total debt burden to $915.4 million during Q2 from $944.8 million in Q4 2021.

On September 20, the Board of Playa Hotels & Resorts N.V. (NASDAQ:PLYA) renewed the authorization for the firm to repurchase up to $100 million of its outstanding common shares.

At the end of the second quarter of 2022, 26 hedge funds in the database of Insider Monkey held stakes worth $296.43 million in Playa Hotels & Resorts N.V. (NASDAQ:PLYA), compared to 28 in the preceding quarter worth $374 million. Among the hedge funds being tracked by Insider Monkey, David Rosen’s Rubric Capital Management is a leading shareholder in Playa Hotels & Resorts N.V. (NASDAQ:PLYA), with 11.7 million shares worth more than $80 million.

07. Hyatt Hotels Corporation (NYSE:H)

Number of Hedge Fund Holders as of Q2, 2022: 26

Hyatt Hotels Corporation (NYSE:H) was founded in 1957 and is headquartered in Chicago, Illinois. Hyatt Hotels Corporation operates as a hospitality company in the United States and internationally. According to Insider Monkey’s Q2 data, Hyatt Hotels Corporation (NYSE:H) was found in the public stock portfolios of 26 hedge funds, compared to 42 funds in the earlier quarter. Southeastern Asset Management is the leading shareholder of the company, with 2.89 million shares worth $213.89 million.

On September 27, Hyatt Hotels Corporation (NYSE:H) was upgraded by Evercore ISI analyst Duane Pfennigwerth from In Line to Outperform with a $100 price target. According to Pfennigwerth, Hyatt Hotels Corporation (NYSE:H) shift to asset-light fee-based revenue would gradually increase the creation of free cash flow. Pfennigwerth believes that the asset-light hotel brands are generally appealing despite their recent downturn, but Hyatt Hotels Corporation (NYSE:H) has a higher long-term re-rating potential than the other brands in the group.

Baron Funds discussed Hyatt Hotels Corporation (NYSE:H) in the second quarter investor letter. Here is what the fund said:

“Hyatt Hotels Corporation (NYSE:H) declined 22.6% and hurt performance by 149 bps in the quarter on investor concerns that a possible recession will result in growth rates that would slow or even turn negative, and the company is currently generating peak profits. Thus far, the company has seen no material slowdown in occupancy levels or rates and continues to increase prices, especially on the leisure side. While leisure may be experiencing peak demand levels, management believes any slowdown in growth should be offset by the continued recovery of group and business customers.

Volumes in these segments are rapidly returning to pre-pandemic levels. This should lead to higher margins as group and business travel spending is higher than leisure spending. The company’s anticipated strong free cash flow, coupled with cash proceeds from owned asset sales, can be used to repay debt incurred to complete its acquisition of Apple Leisure Group. Hyatt’s balance sheet is strong, and it has recently re-initiated its stock buyback program. Hyatt’s robust balance sheet and cash flow profile combined with additional asset sales should also result in more consistent earnings that could result in multiple expansion.”

06. Wyndham Hotels & Resorts, Inc. (NYSE:WH)

Number of Hedge Fund Holders as of Q2, 2022: 30

Wyndham Hotels & Resorts, Inc. (NYSE:WH) is a Parsippany-Troy Hills, New Jersey-based hotel franchisor with over 9,280 locations globally. Wyndham Hotels & Resorts, Inc. (NYSE:WH) performed well in Q2 2022, exceeding forecasts for sales and earnings per share (EPS). Wyndham Hotels & Resorts, Inc. (NYSE:WH) RevPAR exceeded pre-COVID levels for the first time during Q2. The business has four times outperformed consensus EPS forecasts during the last four quarters.

On September 8, Wyndham Hotels & Resorts, Inc. (NYSE:WH) announced the acquisition of Vienna House for $44 million. The acquisition has added about 40 upscale and midscale hotels and more than 6,000 rooms to Wyndham Hotels & Resorts, Inc. (NYSE:WH) existing fleet of resorts. In exchange for long-term franchise agreements with Wyndham Hotels & Resorts, Inc. (NYSE:WH), the Berlin-based HR Group will continue to own, lease, and manage the current Vienna House hotels after Wyndham purchases the Vienna House brand from them. After closing, the Vienna House name will change to Vienna House by Wyndham and it will join Wyndham’s portfolio of famous brands.

According to our database, the number of Wyndham Hotels & Resorts, Inc. (NYSE:WH)’s long hedge funds positions increased at the end of the second quarter of 2022. There were 30 hedge funds that held a position in Wyndham Hotels & Resorts, Inc. (NYSE:WH) in Q2, down from 34 funds in the first quarter.

Just like Marriott International, Inc. (NASDAQ:MAR), Hilton Worldwide Holdings Inc. (NYSE:HLT), and MGM Resorts International (NYSE:MGM), Wyndham Hotels & Resorts, Inc. (NYSE:WH) is one of the best hotel stocks to buy now.

Click here to continue reading and see 5 Best Hotel Stocks To Buy Now.

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Disclosure: none. 10 Best Hotel Stocks To Buy Now is originally published on Insider Monkey.

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