Ocean front property in Arizona
Another hotel company that does not appear to be enjoying the upturn in the economy is Wyndham Worldwide Corporation (NYSE:WYN), the world’s largest hotel franchisor with 7,260 hotels, including the Days Inn, Super 8, Wyndham, Ramada, and Howard Johnson chains. It is also the world’s largest operator of time shares, with 180 resorts and 915,000 owners. However, in this case, size does not matter. While the company did not do as poorly as Hyatt, it also did not do as well as Starwood or Marriott either.
First-quarter sales were up 9% to $1.13 billion. Income before EBITDA was $73 million, down from $90 million the same quarter the year previous. Net income decreased to $27 million, down 16% from $32 million the year previous, and $80 million the immediate preceding quarter. Time shares produced 49% of Wyndham’s revenue last year and 48% of earnings.
‘Book Right and Save’
There are two hotel chains worth a look. Both Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) and Marriott International Inc (NYSE:MAR) have seen significant growth and success in recent quarters, and look to stay on track in the future.
Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) is one of the world’s largest hotel-operating companies, including subsidiaries Sheraton, Westin, and W hotels.
For the first quarter of 2013 Starwood Hotels reported adjusted EBITDA of $315 million. Net income was $213 million, up from $128 million the same quarter the year previous.The company attributed the 66% increase in earnings to a tax benefit and growth in North America.
Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) executives said the company’s first-quarter performance in North America was better than expected, with the daily RevPAR up 4.2% and occupancy up 1.3 percentage points to 68.6%. Systemwide RevPAR increased 5% in constant dollars. U.S. RevPAR increased 6.2%.
Starwood shows all the right signs for success and longevity, and is definitely a stock to keep your eye on.
But the hotel chain with the most impressive numbers is Marriott, the American success story. From the Marriott family soda shoppes to an international hotel chain, this company defines the American dream. And now the stock can bring the American dream to investors.
Marriott’s revenue for the first quarter of 2013 was $3.1 billion, an increase of 23% year-over-year. Net income rose 31% to $136 million.
North American system-wide comparable REVPAR rose 4.8%, and worldwide system-wide REVPAR rose 4.6%.
The company opened nearly 5,300 rooms during the quarter. The company operates 3,800 properties in 74 countries, with more than 650,000 rooms.
Marriott recently announced its decision to hike its quarterly dividend by 30% to 17 cents per share from 13 cents per share. Marriott has a consistent track record of paying dividends and the latest hike brings the forward annual dividend yield, as of May 10, to 1.55%.
The hotel industry feels the pinch of a fickle economy sooner than most industries. Positive growth for hotels is a good reflection of the collective American pocketbook. As always, invest for the long term, and look at the big picture. Will a company stand the test of time? Or will it wrinkle and blemish from within? Marriott and Starwood have proven their mettle, and would make great long-term contributions to your diverse portfolio.
Erin McBride has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
The article 2 Hotels to Love, 1 to Question, 1 to Avoid originally appeared on Fool.com.
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