Growth expectations and better margins drive gains in hotel stocks

Industry earnings and growth/recovery rates have consistently surpassed market expectations over the past six quarters

The hospitality industry has seen plenty of interest since the catastrophic impact of the pandemic, which led to losses in FY21. The hotel industry market cap has more than tripled since 2019 on the combination of a strong earnings rebound and positive surprises, as well as three recent listings.

The industry has good tailwinds. The anticipation is, demand for rooms will outrun supply for a few years despite capacity expansions. Also, the enforced efficiency and cost-cutting measures instituted during the pandemic are paying off in terms of better margins. Three of the top four hotel stocks by market capitalisation hit