There is pent up demand for travel after COVID 19. Airlines have increased seen increased in flight frequencies. As a result, hotels has seen sustain demand for hotel rooms with hotel room rates at high levels.
Many investors and analysts have focus on hotel REITs to ride the travel boom while some hotel stocks have been neglected by investors. In this article, we highlight 3 neglected hotel stocks that could potentially rebound
Hotel Grand Central
Hotel Grand Central owns and operates hotels and properties throughout Singapore, Malaysia, Australia and New Zealand. The founding hotel (Hotel Grand Central) was built by the late Tan Chee Hoe and his son Tan Eng Teong, who now holds the position of Chairman of the Board.
Hotel Grand Central reported revenue increase to S$149.1 million in FY2023 from S$143.5 million the previous year. The increase in revenue is due to an improvement in the hotels’ room occupancies and room rates.
Net profit saw a huge increase from S$0.8 million to S$11.9 million. The increase in profit is mainly due to lower foreign exchange loss of $1.3 million in 2023 compared to a loss of $7.1 million in 2022.
For half year ended 30 June 2024, Hotel Grand Central reported revenue decrease to S$67.9 million compared to S$73.7 million the previous year. However, net profit after tax decrease to S$7.5 million compared to S$10.4 million the previous half year.
Hotel Grand Central share price is at 52 week low. With the recovery in tourism, Hotel Grand could be one of the 3 neglected hotel stocks that could potentially rebound. You can view the company website here.
Hotel Royal
Hotel Royal owns a total of 8 hotels in Singapore, Malaysia and Thailand, with its latest acquisition of Hotel Royale Chulan Bukit Bintang in Kuala Lumpur in 2021.
The Group also owns Grand Complex, a prime commercial complex in the central business district of Wellington, New Zealand, which has approximately 278,000 square feet of lettable office and retail space, and 323 carpark lots.
For half year ended 30 June 2024, Hotel Royal reported revenue increase by 18.2% to S$32.5 million. This is mainly due to improved room occupancy and upward adjustment of room rates in some of the Group’s hotels. Correspondingly, net profit is up 50.2% to S$3.4 million.
Hotel Royal share price is currently trading near 52-week low at S$1.69. It is a very illiquid stock and is seldom traded. However, when the share price rebound, it could be fast and furious too. You can view the company website here.
Hotel Properties
Hotel Properties has interests in 38 hotels under prestigious hospitality brands such as Four Seasons Hotels & Resorts, COMO Hotels & Resorts, InterContinental Hotels Group, Six Senses Hotels & Resorts and Marriott International.
The Group owns hotels, resorts and shopping galleries in 17 countries, namely, Singapore, Malaysia, Thailand, Indonesia, Maldives, Seychelles, Vanuatu, the United States of America, Bhutan, Tanzania, South Africa, Vietnam, the United Kingdom, Italy and Sri Lanka.
Hotel Properties also owns established brands like Hard Rock Cafe and Jamie’s Italian franchises.
For half year ended 30 June 2024, Hotel Properties reported revenue increase from S$319.0 million to S$347.2 million.
The increase was mainly attributable to the opening of Six Senses Kanuhura Maldives following a major refurbishment and better performance by majority of the Group’s hotels and resorts.
The Group recorded a profit before tax of $2.2 million compared to a loss before tax of $8.9 million for the corresponding period last year. With the increase in the number of people travelling, hotel properties could be one of the 3 neglected hotel stocks that could potentially rebound. You can view the company website here.
Conclusion
If investors wants to invest in the hotel sector due to increase in tourism, besides hotel REITs, hotel stocks could be a better choice instead. However, investors need to do their due diligence before investing in any of the hotel stocks.
