HOTL Earnings: Global Travel Set to Rebound in 2022

The Hotel and Lodging Sector acts as an effective economic barometer as it uniquely captures both leisure and business spending across various income levels. Reuters covered the global rebound in travel stating:

Marriott and Hilton, two of the biggest U.S. hotel chains, told investors they expect people to resume packing their bags for business and leisure this year at rates not seen since before the pandemic […] With many workers embracing the flexibility that comes with permanent remote work, Airbnb said people using its short-term rental site booked longer stays during the just-ended quarter.

Top constituents in the HOTL Index include Marriott, Hilton, and Airbnb.

Airbnb’s revenue and gross booking value exceeded prepandemic levels in the fourth quarter and the full-year. The fastest growing category for the company is long-term. Long-term stays of 28 nights or more are Airbnb’s fastest-growing category, accounting for 22% of gross nights booked in the fourth quarter. Furthermore, the average trip length has increased by 15% over the past two years, and stays of seven nights or more now represent almost half of all gross nights booked. Airbnb said, “As a result, people are spreading out to thousands of towns and cities, staying for weeks, months, or even entire seasons at a time.”  No better data point that people wanting flexible work arrangements so they can have experiences. Stock was up 5% on earnings.  “Nearly half of nights booked in the fourth quarter were for a week or longer,” said Airbnb CEO.

Hotel chains Hilton Worldwide Holdings (HLT) and Marriott International (MAR) reported solid fourth-quarter earnings, moving closer to recovering to prepandemic levels. Hilton’s revenue per available room, for example, recovered to 13.5% down on 2019 levels, while Marriott’s was 19% lower. RevPAR, or revenue per available room, which Marriott calculates by dividing room sales, recorded in local currency, for comparable properties by room nights available for a given period, rose by 124.5% worldwide for the quarter ending December from the same period of 2020. CEO said, “By the fourth quarter, global RevPAR was 19 percent below 2019 levels, a 40-percentage point improvement from the decline in the first quarter of the year.”  MAR could begin returning cash to shareholders later in 2022.