Seeking Alpha
Long/short equity, contrarian, research analyst, portfolio strategy
Profile| Send Message| ()  

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.

(click to enlarge)MAR ChartMAR 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.

Source: Marriott Lowers Outlook: Hotel Stocks Fall