Hotel Group Stocks to Watch: Analyzing 8 Companies Showing Positive Signals in the Tourism Market

Investing in hotel stocks has become an attractive option for investors currently, due to the ongoing recovery of the global tourism industry and the rising demand from both domestic and international travelers. Hotel stocks continue to be supported by government tourism promotion policies.

Tourism Market Recovery and Opportunities in Hotel Stocks

After facing challenges from the COVID-19 situation, the hotel industry has gradually returned to normal. Currently, more travelers are on the move, and consumer behavior has shifted toward sustainable and conscious tourism. These conditions create new opportunities for hotel companies that can adapt effectively.

The increase in average revenue per available room (RevPAR) is a positive sign that the hotel market is recovering and beginning to generate profits. Companies with diverse hotel portfolios and good locations will benefit most from this expansion.

Thai Companies Worth Investing in the Current Period

Looking back at the excellent performance of Thai companies, we see a pattern of steady growth.

MINT: A True Diversifier

Minor International Public Company Limited (MINT) reported a net profit of 7,750.22 million baht in Q4 of last year, a 43.37% increase compared to the same period last year. The company’s success stems from its diverse hotel brands, ranging from luxury to budget options suitable for various traveler segments. This business structure provides flexibility to navigate market changes.

AWC: Prime Locations and Development Capabilities

Asset World Corporation Public Company Limited (AWC) benefits from controlling hotel portfolios in valuable tourist areas. Not only does it manage hotels, but it also has the ability to develop related real estate projects. This opens additional revenue streams and long-term growth opportunities.

CENTEL: Standard of Urban Management

Central Plaza Hotel Public Company Limited (CENTEL) is renowned for professional management and international standards. The company plans significant expansion, with a 19 billion baht investment over three years to open more than nine new hotels domestically and abroad. Additionally, existing hotels are being upgraded to luxury standards, expected to support revenue growth in the coming years.

ERW: Risk Diversification Strategy

The Erawan Group Public Company Limited benefits from diversifying hotels across Thailand, including luxury and mid-range brands. This extensive network allows the company to meet various market demands and reduce risks associated with market fluctuations. The group is also supported by increasing demand for MICE activities.

SHR: Positioning in the Premium Segment

S Hotel & Resorts Public Company Limited focuses on high-end travelers. Key projects include the renovation of SAii Laguna Phuket, expected to be completed ahead of schedule, and the SO/Maldives hotel entering peak travel season. These initiatives are expected to boost revenue growth.

Key Thai Stock Comparison Table

Global Leaders: Marriott Hilton and Wyndham

For investors interested in expanding abroad, there are global giants worth watching.

Marriott International (MAR): Market Leader

Marriott International is a top global hotel operator with a worldwide network of hotels and major brands like Marriott, Ritz-Carlton, and Sheraton. The company invests continuously in technology and service experience, which are key factors supporting long-term growth and competitiveness.

Hilton Worldwide Holdings (HLT): Strong Brand and Professional Management

Hilton is expanding in a growth phase, with a broad hotel network managed efficiently. Customer satisfaction ratings are high. Its flexible business model helps it succeed in various market conditions.

Wyndham Hotels & Resorts (WH): Middle-Market Specialist

Wyndham specializes in cost management and mid-range to economy hotels. It grows steadily through franchise expansion and operational improvements.

International Company Comparison Table

Key Factors in Choosing Hotel Stocks

Investment decisions should not rely on a single piece of information. Consider multiple aspects to maximize returns.

Financial Status Analysis

First, review revenue and profit trends over several years. Analyze gross profit margin and net profit margin to assess profitability. Also, examine financial ratios like debt-to-equity to evaluate financial strength and risk.

Management and Hotel Portfolio

The experience and track record of management influence company performance. Review long-term strategies and plans. Consider portfolio diversity versus focus. Also, monitor occupancy rates, a key performance indicator; higher rates generally indicate better performance.

Key Hotel Metrics

Average Daily Rate (ADR) and RevPAR are crucial indicators. Together with occupancy rates and ADR, they provide a comprehensive view of hotel performance.

External Factors

Analyze tourism industry growth trends domestically and globally. Keep track of economic conditions, interest rates, and exchange rates in countries where the company operates. Hotel location and accessibility are also important.

Brand Strength

Companies with strong, reputable brands often have competitive advantages. For example, Centara is known for urban management, while SHR specializes in luxury segments.

How Thai Investors Can Invest in Hotel Stocks

Thai investors have several options for investing in hotel stocks.

Trading on the Stock Exchange of Thailand (SET)

The simplest method is opening a trading account with a securities company (broker), which acts as an intermediary for orders on SET. Benefits include convenience, lower fees compared to foreign markets, and no currency exchange concerns. Limitations include fewer stock choices compared to international markets.

Investing via Mutual Funds

Another option is purchasing units in funds focused on hotel or related sectors. Managed by professionals, this diversifies risk across multiple stocks. Suitable for investors with limited time. Drawbacks include higher management fees and less direct control over the portfolio.

Trading CFDs

For more flexibility, CFDs (Contracts for Difference) are popular. This allows quick trading of hotel stock prices without owning the actual shares, and profits can be made from both rising and falling prices. However, it involves higher risk due to leverage and may incur overnight fees.

What Investors Should Know

Investing in hotel stocks offers potential for significant returns, but also involves risks such as global economic volatility, political uncertainty, unforeseen events, and changes in traveler behavior.

Regularly follow news and analysis from trusted sources, including company earnings reports and tourism industry trends. For new investors, start with small amounts, understand the risks, and gradually increase investments as confidence grows.

Summary

Hotel stocks are a promising choice for investors seeking growth in the tourism industry, whether through Thai companies like MINT and CENTEL or international giants like Marriott and Hilton. Careful analysis and risk management are essential. Choose investment methods aligned with your risk tolerance and liquidity needs. Hotel stock investments are suitable for medium- to long-term investors aiming to diversify their portfolios.