The travel industry has experienced difficulties in the past year. However, with the gradual reopening of the world, the demand for hotels is anticipated to increase. Therefore, investors may find hotel stocks a potentially profitable opportunity due to the current trend. However, choosing the right hotel stock can be challenging with limited options, especially on the TSX.
This is the right place to find information on the best hotel stocks in Canada. This article will examine some of the leading hotel stocks in Canada, considering factors such as market performance, financial stability, and growth potential. After reading this article, you will better understand which hotel stocks may be good investment choices.
What's in the Article:
- Best Hotel Stocks for Canadians
- Great Canadian Gaming Corp (TSX: GC)
- InterContinental Hotels Group (NYSE: IHG)
- Hilton Worldwide Holdings Inc. (NYSE: HLT)
- Choice Hotels International Inc. (NYSE: CHH)
- Marriott International Inc. (NASDAQ: MAR)
- Four Seasons Hotels & Resorts
- SilverBirch Hotels & Resorts (American Hotel Income Properties REIT)
- Hotel REITs in Canada
- Why Invest In Hotel Stocks in Canada?
- How to Invest in Hotel Stocks
- Lodging & Hospitality Stocks in Canada
Best Hotel Stocks for Canadians
The Canadian hotel industry has seen a dramatic increase in business over the past few years. This is due to several factors, including increased tourism, more business travel, and better air connections between major cities. As such, investing in hotel stocks could be an excellent way for Canadians to benefit from this trend.
The best Canadian hotel stocks depend on your investment goals. For example, hotel REITs may be a good choice if you’re looking for income. On the other hand, if you’re looking for capital gains, you may want to look into individual stocks in the industry.
Unfortunately, most hotel chains in Canada are now owned by REITs or other foreign companies. Below is a list of some of the top Canadian hotel company stocks:
Great Canadian Gaming Corp (TSX: GC)
Great Canadian Gaming Corp (TSX: GC) is one of the leading hotel and gaming companies in Canada, with over 30 properties across British Columbia, Ontario, Nova Scotia and New Brunswick. The company operates casinos, racetracks, community gaming centers, and various hospitality venues such as hotels and resorts. We rated GCGC as one of our top picks for the best Canadian casino stock to buy.
GC has more than 15 years of experience in the industry. Its portfolio includes a wide range of hotels, from budget-friendly to upscale, making it an excellent choice for investors looking for diversification.
InterContinental Hotels Group (NYSE: IHG)
InterContinental Hotels Group (TSX: IHG) is one of the largest hotel groups in the world and has a presence in Canada with over 200 hotels. The company focuses on mid-market and upscale full-service hotels, extended-stay hotels, select-service hotels, and timeshare properties. InterContinental Hotels Group operates under several brand names, including InterContinental, Crowne Plaza, Holiday Inn Express, Staybridge Suites and more.
InterContinental Hotels Group is a relatively safe investment, as its stock price has performed well over the past few years. The company also boasts a strong balance sheet, with plenty of cash to fund future growth.
Hilton Worldwide Holdings Inc. (NYSE: HLT)
Hilton Worldwide Holdings Inc. (NYSE: HLT) is one of the world’s largest hospitality companies, with over 4,900 hotels and resorts in 90 countries and territories. Its portfolio includes some of the most iconic hotel brands, including Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, and Conrad Hotels & Resorts.
Hilton Worldwide Holdings Inc. is a relatively safe investment, as its stock price has steadily increased in recent years.
Choice Hotels International Inc. (NYSE: CHH)
Choice Hotels International Inc. (NYSE: CH H) is another major player in the Canadian hospitality industry. The company owns and franchises various hotel brands, including Comfort Inn, Quality Inn, and Econo Lodge. It also holds the vacation rental business Vacation Rentals by Choice Hotels.
Choice Hotels International Inc. has been a strong performer in recent years, with its stock price increasing steadily over the past few years.
Marriott International Inc. (NASDAQ: MAR)
Marriott International Inc. (NASDAQ: MAR) is one of the world’s leading hospitality companies, with more than 7,000 properties located in over 100 countries and territories. Its portfolio includes some of the most iconic hotel brands, including Marriott Hotels & Resorts, JW Marriott Hotels & Resorts, and The Ritz-Carlton.
Marriott International Inc.’s stock price has steadily increased in recent years, making it a relatively safe investment.
This isn’t on North American exchanges, but AccorHotels, a French company, ended up owning Fairmont Hotels and Resorts Inc. (TSX: FHR), one of the stronger hotel chains in Canada, in 2016. This and Choice Hotels International (NYSE: CHH) are two of the best hotel stocks available to Canadians. Both companies have strong track records of financial performance, and their stocks could be suitable long-term investments for Canadian investors.
Four Seasons Hotels & Resorts
Four Seasons Hotels & Resorts is one of Canada’s most prominent hotel chains. It is well-known for its luxurious accommodations, impeccable service, and top-notch amenities. The company has properties in major cities worldwide, including Toronto, Montreal, Vancouver, Beijing, Tokyo and London.
Four Seasons Hotels & Resorts is a private investment; it was taken private in a deal involving Bill Gates and Prince Al-Waleed bin Talal.
SilverBirch Hotels & Resorts (American Hotel Income Properties REIT)
SilverBirch Hotels & Resorts is a leading Canadian hotel and resort company now part of American Hotel Income Properties REIT LP (HOT-UN-T). It owns, manages, and operates a portfolio of 15 hotels and resorts across Canada, ranging from luxury full-service properties to select-service hotels offering best-in-class amenities. In addition, the company also provides complete asset management services to third-party owners of hotels and resorts.
SilverBirch Hotels & Resorts is a relatively safe investment, as it has performed well over the past few years. It’s also worth noting that the company is backed by some of Canada’s largest institutional investors, so its stock price should remain stable.
Hotel REITs in Canada
Hotel REITs (Real Estate Investment Trusts) are a popular way to invest in the hotel industry in Canada. REITs allow investors to purchase shares in a company that owns and operates hotels or other hospitality-related properties. These trusts typically generate income by leasing their properties and collecting fees from their tenants.
Hotel REITs in Canada include Canadian Apartment Properties REIT (TSX: CAR.UN) – also one of the best Canadian apartment REITs, as well as InnVest Real Estate Investment Trust (TSX: INN.UN) and Chartwell Retirement Residences REIT (TSX: CSH.UN). These trusts have portfolios of hotels or other hospitality-related properties located in major cities across Canada. All three have seen substantial gains in their stock prices over the past few years.
Investing in hotel REITs is an excellent way for investors to benefit from the trend of increasing tourism in Canada and take advantage of the potential for growth in the industry. These trusts offer investors a relatively low-risk opportunity to invest in the Canadian hotel industry and a steady income stream from their dividends.
Canadian Apartment Properties REIT (TSX: CAR.UN)
Canadian Apartment Properties Real Estate Investment Trust (TSX: CAR.UN) is one of Canada’s largest owners and operators of multi-residential apartment buildings. The company owns over 56,000 residential suites across Canada, making it one of the leading players in the Canadian hotel and accommodation sector and part of Canadian blue-chip stocks that pay high dividends.
Chartwell Retirement Residences REIT (TSX: CSH.UN)
Chartwell Retirement Residences REIT (TSX: CSH.UN) is one of Canada’s leading hotel stocks and the best retirement home stocks to buy. Chartwell is a real estate investment trust that owns and operates over 200 retirement communities nationwide. The company has over 25,000 units in its portfolio and is one of North America’s largest senior housing operators.
Chartwell’s stock has seen a steady increase in its share price over the past few years, making it an attractive investment for those looking for a relatively safe source of income. The company also offers a quarterly dividend of $0.14 per share, which gives investors an attractive yield.
InnVest REIT (TSX: INN.UN)
InnVest REIT (TSX: INN.UN) is a publicly listed real estate investment trust that invests in hotels and hotel-related properties across Canada. Founded in 2008, the company owns or has interests in over 130 hotels with more than 16,000 guest rooms in major urban centres, resort destinations and select secondary markets across Canada. The company’s portfolio includes hotels operated under the Fairmont, Radisson, Delta and Marriott brands.
InnVest REIT has seen its stock price steadily increase in recent years, making it a relatively safe investment. The company also pays a quarterly dividend of $0.09 per share, offering income-seeking investors an attractive yield.
Why Invest In Hotel Stocks in Canada?
Investing in hotel stocks in Canada can be an attractive option for several reasons:
- Diverse and Growing Tourism Industry: Canada’s tourism industry is robust and diverse, attracting visitors for both leisure and business. The country’s natural beauty, cultural diversity, and well-developed urban centers make it a popular destination. This steady flow of tourists can translate into consistent demand for hotel accommodations.
- Stable Economy: Canada has a stable economy and political environment, which can reassure investors. This stability can lead to a predictable and favourable business environment for the hotel industry.
- Global Events and Attractions: Canada regularly hosts international events and has numerous attractions that draw global attention. These events can lead to spikes in hotel bookings, benefiting the hotel industry.
- Real Estate Appreciation: Investing in hotel stocks is also a way to invest in real estate indirectly. Hotels are typically located in prime areas, and these properties’ value can appreciate over time.
- Diversification: Hotel stocks can diversify an investment portfolio. The hospitality sector often has different market dynamics than other industries, which can help spread risk.
- Dividend Income: Many hotel stocks offer dividends, especially those structured as REITs (Real Estate Investment Trusts). This can provide investors with a steady income stream and potential capital gains.
- Recovery Post-Pandemic: The hotel industry is expected to rebound as the world recovers from the COVID-19 pandemic. This recovery could present growth opportunities for hotel stocks, especially if they have managed to adapt and innovate during the downturn.
- Increasing Business Travel: With the global economy recovering, business travel is expected to increase, which can directly benefit the hotel industry.
- Technological Advancements: The hotel industry is increasingly adopting technology for better customer service and operational efficiency. Companies at the forefront of this trend may offer promising investment opportunities.
- Strategic Developments: Many hotel chains are expanding their presence, renovating existing properties, and improving service offerings. These strategic developments can enhance their competitiveness and profitability.
However, it’s important to note that investing in stocks, including hotel stocks, involves risks. The hospitality industry can be sensitive to economic cycles, and factors like global health crises can significantly impact it.
How to Invest in Hotel Stocks
Investing in hotel stocks is easy and can be done through most major online brokers.
First, it is vital to understand the different types of hotels and how investing in them works. Hotels can range from budget properties to luxury resorts, and understanding the different business models is critical to making the right investment decisions. Researching the company you are considering investing in and understanding its financials is essential.
Second, doing your due diligence on any potential investments is essential. For example, read the company’s financial statements and analyze its past performance. In addition, it would be best to look for news about hotel stocks and industry-wide trends that may help you make more informed decisions.
Finally, it is crucial to have a long-term outlook and not get too caught up in short-term movements of the market. For example, investing in hotels can be a great way to benefit from long-term growth in the industry. Still, it’s important to remember that risks are also associated with any stock investment.
Lodging & Hospitality Stocks in Canada
Hotel stocks allow investors to invest in the lodging and hospitality sectors. Various publicly traded companies on the TSX enable investors to gain exposure to this industry. However, investors must do their due diligence before investing in any stock.