3 Buy The Dip Hotel Stocks

Most hotels around the globe had to close their doors last year due to restrictions imposed to curb the spread of the deadly COVID-19 virus. While the industry began recovering earlier this year, the resurgence of COVID-19 cases due to the rapid spread of the Delta variant has fostered concerns related to the pace of the sector’s recovery.

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Image Source: Unsplash

However, increasing vaccinations could lead to more leisure travel and, in turn, increase the hotels’ occupancy rate. According to the U.S. Lodging Industry and Market Outlook from Lodging Analytics Research & Consulting (LARC), the U.S. RevPAR is expected to increase by 30.6% in 2021 and at a 16% CAGR from 2020 through 2025.

Given this backdrop, we think prominent hotel stocks InterContinental Hotels Group PLC (IHG - Get Rating), Choice Hotels International, Inc. (CHH - Get Rating), and Wyndham Hotels & Resorts, Inc. (WH - Get Rating), which are currently trading significantly below their 52-week price highs, could be solid bets.

InterContinental Hotels Group PLC (IHG - Get Rating)

Headquartered in Denham, in the U.K., IHG owns, manages, franchises, and leases hotels across the United States, Europe, Asia, and internationally. The company operates roughly 5,994 hotels and 884,484 rooms in more than 100 countries.

On September 8, IHG introduced artificial intelligence (AI)-focused voice-controlled smart rooms at the Kimpton Rowan Hotel in Palm Springs, Calif.,  in partnership with Josh.ai. As the first global hotel company to deploy Josh.ai, the move is expected to give it an edge over its peers.

IHG’s total revenue increased 15.8% year-over-year to $565 million for the six months ended June 30, 2021. The company’s operating profit came in at $138 million, versus a $233 million loss in the year-ago period. Its adjusted EBITDA increased 117.8% year-over-year to $233 million. Also, its EPS was  $0.40, up 724.5% year-over-year.

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