Wells Fargo's Hotel Picks and Growth Predictions
Skift Take
- Wells Fargo initiated coverage on Hyatt, Hilton, and Marriott, favoring operators targeting group and high-end travel, with strong growth outlooks and reasonable valuations. They predict a 3%-4% RevPAR growth in 2024.
- Accor added Hotel Andra Seattle to its portfolio and plans for new MGallery properties.
- International tourism is nearing pre-pandemic levels, with a 38% increase in travelers in 2023 compared to 2022. The Middle East leads the recovery, while Europe, Africa, and the Americas show significant improvement.
It was another strange market today with the DJIA down 80 points, Nasdaq up 44, the S&P 500 down 3 points, and the 10-year treasury yield plunging .12 to 4.17%. Lodging stocks were lower. BHR traded down -6%, VAC, VCSA, and SLNA were each down -5% with SLNA at another all-time low.
Wells Fargo initiated coverage on Hyatt, Hilton, and Marriott. WF said that, heading into 2024, they favor operators that cater to group and higher-end business/leisure travel, have strong unit growth outlooks, and carry reasonable valuations. WF expects macro uncertainty to ease in 2024 and international rates to stabilize, which should help new construction/unit growth and asset sales. They are forecasting RevPAR growth of 3%-4% in 2024 and prefer operators with exposure to group, high-end leisure, and the Asia Pacific market. They initiated on Hyatt with an Overweight rating and $138 price target while starting Hilton and Marriott with Equal Weight rating
