Delta Air Lines, Inc. (DAL), InterContinental Hotels Group PLC (ADR) (IHG): A Travel Package of Stocks

The merger between Hertz and Dollar Thrifty should help to reduce competition in this industry. While this is not expected to benefit consumers, the price increases and economies of scale that can be realized should benefit shareholders of rental car companies, in this case those of Hertz and Avis Budget.


With so many hotels out there it is often hard to pick just one. The same goes with hotel stocks, with each competitor offering its own unique locations and brands. Among my favorites in this industry is InterContinental Hotels Group PLC (ADR) (NYSE:IHG), a company that seeks to reward its shareholders in three ways.

The first way is one which all companies strive to do, and that is share price appreciation. Shares went on a fairly good run since early 2012 but slipped back away from the $30 mark in April. If hotels rise along with the broader market, InterContinental Hotels Group PLC (ADR) (NYSE:IHG) could be ready to move back to the $30 level in the near future.

Unlike most airlines and rental car companies, InterContinental Hotels Group PLC (ADR) (NYSE:IHG) pays shareholders a dividend of 2.3 percent. While this is not the level that would really qualify IHG as an income stock, it does help to return a bit of capital to shareholders as they wait for the share price to rise along with the economic recovery.

But the final way is something that is not seen as much as it used to be. IHG offers registered shareholders access to a dedicated website that provides discounts on bookings at InterContinental Hotels Group PLC (ADR) (NYSE:IHG) hotels. Unless you’re staying at a lot of IHG hotels, this discount is unlikely to make a strong enough financial argument on its own but it is nice to see that IHG is taking steps to be shareholder friendly and reward shareholders whenever possible.

Travel package

Many investors are bullish on travel as part of a broader economic recovery but want to remain diversified across multiple industries. Fortunately, the travel market offers a lot of components allowing investors to both invest in travel and diversify their risk. Similar to booking a vacation on a travel site, the market offers investors a broad range of options to chose from for their travel investing experience.

Alexander MacLennan owns shares of Delta Air Lines. This article is not an endorsement to buy or sell any security and does not constitute professional investment advice. Always do your own due diligence before buying or selling any security.The Motley Fool owns shares of Hertz Global Holdings.

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