Shares of the major hotel companies, Marriott International Inc (MAR), Starwood Hotels & Resorts (HOT), Wyndham Worldwide (WYN), and Hyatt Hotels Corp (H) are all trading sharply lower on Thursday following a cut in earnings guidance by Marriott, the industry leader.
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MAR data by YCharts
Reasons For Lowering Guidance
- Weakness in international markets, notably India, China, and the Middle East.
- Lower revenue per room.
- Notably, Marriott said U.S. business remained strong.
Lack Of Dividend Support
It is worth noting that none of the major players in the hotel business pay big dividends.
MAR: 1.45%
HOT: 1.02%
H: 0%
WYN: 1.83%
My Take
I would not yet be a buyer of the sector based on this decline. The lack of dividend support means that these names can trade significantly lower before they become attractive based on yield. However, I would view any significant decline in these names as a buying opportunity as I believe the future is bright for the hotel business.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
