Travel and Vacation Providers Stocks Q3 Recap: Benchmarking Choice Hotels (NYSE:CHH)

November 27, 2024 at 03:09 AM EST

CHH Cover Image

Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Choice Hotels (NYSE: CHH) and its peers.

Airlines, hotels, resorts, and cruise line companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted from buying "things" (wasteful) to buying "experiences" (memorable). In addition, the internet has introduced new ways of approaching leisure and lodging such as booking homes and longer-term accommodations. Traditional airlines, hotel, resorts, and cruise line companies must innovate to stay relevant in a market rife with innovation.

The 16 travel and vacation providers stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was 0.9% below.

Luckily, travel and vacation providers stocks have performed well with share prices up 14.1% on average since the latest earnings results.

Choice Hotels (NYSE: CHH)

With almost 100% of its properties under franchise agreements, Choice Hotels (NYSE: CHH) is a hotel franchisor known for its diverse brand portfolio including Comfort Inn, Quality Inn, and Clarion.

Choice Hotels reported revenues of $428 million, flat year on year. This print fell short of analysts’ expectations by 0.9%, but it was still a strong quarter for the company with an impressive beat of analysts’ EPS estimates and a decent beat of analysts’ adjusted operating income estimates.

"Choice Hotels generated another quarter of record financial performance, demonstrating the successful execution of our growth strategy and giving us the confidence to raise our full-year guidance," said Patrick Pacious, President and Chief Executive Officer.

Interestingly, the stock is up 9.4% since reporting and currently trades at $151.80.

Is now the time to buy Choice Hotels? Access our full analysis of the earnings results here, it’s free.

Best Q3: Playa Hotels & Resorts (NASDAQ: PLYA)

Sporting a roster of beachfront properties, Playa Hotels & Resorts (NASDAQ: PLYA) is an owner, operator, and developer of all-inclusive resorts in prime vacation destinations.

Playa Hotels & Resorts reported revenues of $183.5 million, down 13.9% year on year, outperforming analysts’ expectations by 4.1%. The business had a stunning quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

The market seems happy with the results as the stock is up 7.9% since reporting. It currently trades at $9.72.

Is now the time to buy Playa Hotels & Resorts? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Sabre (NASDAQ: SABR)

Originally a division of American Airlines, Sabre (NASDAQ: SABR) is a technology provider for the global travel and tourism industry.

Sabre reported revenues of $764.7 million, up 3.3% year on year, falling short of analysts’ expectations by 1.4%. It was a slower quarter as it posted a significant miss of analysts’ EPS and airline bookings estimates.

Sabre delivered the weakest full-year guidance update in the group. As expected, the stock is down 9.7% since the results and currently trades at $3.72.

Read our full analysis of Sabre’s results here.

Target Hospitality (NASDAQ: TH)

Essentially a builder of mini communities, Target Hospitality (NASDAQ: TH) is a provider of specialty workforce lodging accommodations and services.

Target Hospitality reported revenues of $95.19 million, down 34.8% year on year. This print beat analysts’ expectations by 8.3%. It was a very strong quarter as it also put up an impressive beat of analysts’ EPS estimates.

Target Hospitality pulled off the biggest analyst estimates beat and highest full-year guidance raise, but had the slowest revenue growth among its peers. The stock is down 4.8% since reporting and currently trades at $8.76.

Read our full, actionable report on Target Hospitality here, it’s free.

Royal Caribbean (NYSE: RCL)

Established in 1968, Royal Caribbean Cruises (NYSE: RCL) is a global cruise vacation company renowned for its innovative and exciting cruise experiences.

Royal Caribbean reported revenues of $4.89 billion, up 17.4% year on year. This print met analysts’ expectations. Taking a step back, it was a mixed quarter as it also logged a decent beat of analysts’ adjusted operating income estimates but EPS guidance for next quarter missing analysts’ expectations.

The stock is up 18.6% since reporting and currently trades at $241.50.

Read our full, actionable report on Royal Caribbean here, it’s free.

Market Update

In response to the Fed's rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed's 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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