Finding the best hotel stocks to buy can be a strategic move with the travel and tourism sector experiencing a significant rebound in 2024. Strong U.S. consumer spending trends in the first half of the year continue to fill the pent-up demand for both business and leisure travel.
UN Tourism, an entity of the United Nations, forecasts international travel to reach pre-pandemic levels this year. A persistent recovery in Asia and the Middle East contributed to tourism reaching 97% of pre-pandemic levels in the first quarter of 2024. Moreover, American Express (NYSE:AXP) recently boosted its full-year profit outlook on robust spending from its premium cardholders.
Even with consumer confidence falling to an eight-month low of 66 this month, the travel and leisure sector will likely remain relatively stable. Consumers are biting the bullet and not shying away from their travel plans. This unfortunate reality will have dire consequences in the future but remains a positive backdrop for the hotel industry.
Now, let’s unpack the three best hotel stocks to buy in July 2024.
Marriott International (MAR)
Marriott International (NASDAQ:MAR) is the largest hotel company in the world by number of available rooms. It operates a diverse portfolio of brands, such as Marriott, Sheraton, and Ritz-Carlton, including nearly 8,700 properties across 139 countries.
Marriott experienced an incredible post-pandemic recovery driven by strong operation performance and an expansion of its available rooms. This increase was also supported by strong occupancy rates and revenue per average room (RevPAR). Additionally, management has been increasingly focused on high-growth markets such as Asia-Pacific and the Middle East. The performance has been notable and its loyalty rewards program now boasts more than 203 million global members.
In the first quarter, revenue increased 5% from a year ago to $1.54 billion. Although its profits sank in the quarter, the company added 46,000 net new rooms with more than 202,000 under construction. Moreover, international RevPar increased 11%, led by nearly 17% growth in Asia-Pacific.
With global travel demand remaining strong, Marriott is among the best hotel stocks to buy in July.
InterContinental Hotels Group (IHG)
InterContinental Hotels Group (NYSE:IHG) is another dominant player in the hotel industry poised for significant growth. It owns and operates brands that include InterContinental, Holiday Inn and Crowne Plaza, catering to a wide range of travelers from budget-conscious to luxury.
Despite InterContinental’s strong financial results and vast global footprint, the broader market often overlooks it, possibly because it’s based in the U.K. rather than domestically. However, the company’s revenue, earnings growth and significant pipeline expansion present a tremendous long-term growth opportunity.
In the 2023 , IHG’s RevPAR increased 16% year over year. Operating income exceeded $1 billion for the first time, and the company added 556 hotels into its pipeline. Occupancy rates have been extremely solid going into 2024, reflected in its first-quarter results. The company reported 9% year-over-year growth in Europe, the Middle East, and Africa, with global occupancy increasing to 62%. InterContinental is one of the best hotel stocks for investors looking to capitalize on the rebound in international travel demand.
Hyatt Hotels (H)
Hyatt Hotels (NYSE:H) stands as one of the best hotel stocks to buy in July 2024. The company offers luxurious hotels and resorts through its portfolio of brands such as Park Hyatt, Grand Hyatt, Andaz and Hyatt Regency.
Hyatt is great for investors looking to capitalize on the global travel rebound. Its emphasis on providing luxury travel experiences supports robust spending trends in the luxury travel segment. Additionally, Hyatt has prioritized expanding its footprint in international markets, particularly Asia and Europe. Its pipeline and World of Hyatt membership is also growing by double digits, signally a significant expansion of its market reach.
In the first quarter, RevPAR increased 5.5% year over year. Net earnings skyrocketed 800% yearly to $522 million, with its pipeline hitting a record high of 129,000 rooms. With the World of Hyatt membership growing 22% to a record 46 million members, Hyatt should certainly be kept on your radar in 2024.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
