Airbnb has had a wild ride in recent weeks.
In September, the accommodation platform was ushered into the S&P 500 – the leading benchmark of stocks – just as it got effectively shut out of New York City, one of its largest global markets.
New York City’s short-term rentals host registration laws, which came into effect on September 5, have made tens of thousands of rental sites illegal and triggered a boom in the black market for underground rentals. This may be just the beginning, though.
Elsewhere across the globe, municipal authorities from Turkiye to Malaysia are now mulling similar bans or tighter restrictions on Airbnb listings. Could the New York set a precedent for a broader global crackdown?
The fiasco in New York has yet to put too much of a dent in Airbnb’s stock price, which has fluctuated around $120 for the past six months. Yet, if the crackdown impairs operations over the coming business quarters, it may potentially see a reverse in fortunes back toward the industry heavyweights.
“We are bullish on New York, and we view this as a tailwind,” one C-suite hotel exec in New York told Skift, forecasting the city’s hotels can reasonably expect roughly 15% revenue growth next year thanks to Airbnb’s woes.
This could be a prime time to assess the outlook of leading hotelier stocks. These three may be on investors’ watch list.
Valued at $58 billion, Marriott International (MAR) is the largest hotel group in the world. With a diverse portfolio of brands, including Marriott, JW Marriott, Ritz-Carlton, and Sheraton, the group dominates a wide variety of market segments. It has also excelled in brand recognition and generating customer loytalty through its industry-leading Marriott Bonvoy rewards program.
Marriot is trading at around $195, roughly 30% north of where it started the year. The company’s next earnings call is scheduled for November 2, 2023.
Zacks Equity Research is projecting earnings of $8.63 per share and revenue of $23.93 billion for Marriot, representing +29% and +15.21% growth, respectively, from the prior year.
Hilton is another titan to size up. With a market cap of $40 billion, it is the third-largest hotelier in the world.
It is a legacy conglomerate – dating back to 1919 – yet it is expanding furiously. Last year, Hilton opened 355 new establishments – nearly a hotel a day. That opened 58,200 new rooms, representing almost 5% of its accommodation portfolio. Hilton’s stock price is at $152 and is currently trading up around 20% year-to-date. On October 25, Hilton will announce its latest earnings.
Zacks estimate for Hilton 2023 earnings per share and sales are for growth of 23.7% and 14.8%, respectively, from one year prior.
With a total market value of $12 billion, it is the seventh-largest company in accommodation. As well as its eponymous flagship brand, it also owns Holiday Inn and Crowne Plaza under its banner.
Strong group bookings and international trips continue to drive InterContinental’s growth. It has boasted solid performance in recent years. Over the last year alone, the group’s earnings-per-share rocketed from $2.37 to $3.76. InterContinental has enjoyed roughly 28% year-to-date growth in 2023, and is currently trading at $75.
Its next earnings call is October 20, 2024.
Zacks Consensus Estimate for InterContinental Hotels 2023 earnings per share and sales suggests growth of 31.6% and 59%, respectively, from one year earlier.
I’m Steve. I’m an English Teacher, traveler, and an avid outdoorsman. If you’d like to comment, ask a question, or simply say hi, leave me a message here, on Twitter (@thefrugalexpat1). Many of my posts have been written to help those in their journey to financial independence. I am on my journey, and as I learn more I hope to share more. And as always, thanks for reading The Frugal Expat.