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Market cap of world’s top 5 hotel chains up by $12bn

LONDON, August 4, 2021

Although hotel stocks underperformed the broader economy in June for the fourth straight month, the market cap of the world's five largest hotel chains still recovered significantly this year to increase by $12 billion, a report said.

According to data presented by StockApps.com, the combined market capitalization of Wyndham Hotels and Resorts, Choice Hotels International, Marriott International, Intercontinental Hotels Group, and Hilton Worldwide Holdings, as the five largest hotel chains in the world stood at $107.8 billion last week, nearly a $12 billion increase YTD.

The year 2020 was probably the most challenging year for the hotel industry in decades. Although hotels worldwide implemented increased safety and sanitation measures and cautiously reopened for the summer travel season, all of them witnessed colossal revenue and market cap drops.

The first half of 2021 brought a long-expected recovery, with hotel stocks surpassing their pre-pandemic values. However, in June, the Covid-19 Delta variant brought fears of new restrictions and disruptions for the global hotel industry, causing stocks to drop again. Despite that, the market cap of the world's largest hotel chains still recovered significantly.

The YCharts data show the market cap of Wyndham Worldwide, the biggest hotel chain in the world by the number of hotels, stood at $4.4 billion in January. By June, the combined value of shares of the US corporation, which owns 8,092 hotels, jumped to nearly $7.2 billion. Although this figure slipped to $6.61 billion last week, it still represents a $2.2 billion increase YTD.

The market cap of the second-largest hotel chain globally, Choice Hotels International, rose by $670 million in this period, rising from $5.9 billion in January to $6.57 billion last week. Intercontinental Hotels Group follows with a $230 million market cap increase.

Statistics show Hilton Worldwide Holdings and Marriot International were the biggest gainers this year, with their combined market cap rising by $8.8 billion in the last seven months. In January, the combined value of shares of Marriot International stood at $42.8 billion. After rising to $47.4 billion in June, this figure slipped to$46.7 billion last week, still almost a $4 billion increase YTD. Hilton Worldwide Holdings follows with a $4.9 billion market cap increase since the beginning of the year.

Although hotel stocks bounced back in 2021, the entire sector is far from recovery. In fact, Statista data indicate it will take another two years for the global hotel industry to reach pre-pandemic levels.

In 2021, revenues are projected to grow by 33% YoY to $192.3 billion, 47% less than in 2019. However, the following year is expected to witness even more significant growth, with hotels worldwide generating over $310 billion in revenue, still significantly below pre-Covid-19 levels.

The year 2023 is forecast to witness $370.8 billion in sales revenues, slightly above 2019 figures. By the end of 2025, the entire sector is expected to reach a $462.4 billion value.

Statistics also show the number of users in the hotel industry plunged by 60% amid the pandemic, falling from 1.1 billion in 2019 to 438.5 million in 2020. Although Statista predicts this figure to rise to 576.5 million in 2021, that is still half the pre-pandemic levels. – TradeArabia News Service




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