Hotel chain Hyatt and franchiser Choice Hotels both reported first-quarter earnings that beat expectations, and said they expected travel demand to keep rebounding in the weeks ahead.
The companies reported as consumers' eagerness to resume vacations clashes with rising prices for basic goods. Hyatt, Choice and other travel stocks rebounded Tuesday, after worries about the Fed's stance against inflation and the impact of China's lockdowns on the global economy sank markets on Monday.
Rival travel stocks Marriott International and Hilton Worldwide reported results last week. Both Hilton and Marriott described customers as willing to pay more to travel after two years of Covid, and said rising prices for gas and hotel rooms had yet to sour sentiment.
Hyatt Earnings
Hyatt reported a smaller-than-expected 33-cent loss. Revenue came in at $1.162 billion, according to FactSet. That was above estimates for $1.105 billion.
"Record levels of leisure demand fueled nearly 60% of our rooms revenue in the quarter with continued outperformance at our resorts and all-inclusive properties," CEO Mark Hoplamazian said in a statement.
"We expect the rate of recovery to broaden and strengthen in the months ahead as evidenced by the strong pace of actualized and future bookings for business and group travel," he continued."
He said the company's outlook was "very optimistic" for the rest of the year. And he said Hyatt's revenue per available room in April had built off momentum from March.
Hyatt stock jumped 6.3% to 84.84 in the stock market today. Shares tumbled 6.7% to 79.79 as the market sold off on Monday, puncturing the bottom of a consolidation pattern. Shares have moved below their 200-day line in recent days.
The stock has a 52 Composite Rating. Its EPS Rating is 34.
Among other travel stocks, Marriott added 2.6%, but was still below its 50-day line. Hilton rose 3.4%. That stock was still below its 200-day line.
Travel stocks remains volatile. The industry is rebounding on strong U.S. demand. But it is also confronting more difficult trends abroad. Higher oil costs have hit airlines, which spend a lot on jet fuel, harder than they have hotels.
Airline stocks are dealing with higher fuel prices following Russia's invasion of Ukraine, which has threatened travel demand in Europe. Meanwhile, China's strict anti-Covid measures could lower demand and prices for oil, but suppress travel to the nation and weigh on the global economy overall.
Choice Hotels Earnings
Choice Hotels earned $1.03 per share. That was above FactSet expectations for 89 cents per share. Revenue of $257.7 million beat expectations for $255 million.
CEO Patrick Pacious said the company expected strong demand to continue into the summer travel season.
"With consumers prioritizing spending on leisure travel and continually looking to discover the great American outdoors, our hotels are in the right locations to capture this growing travel demand," he said.
Choice Hotels stock rose 4% to 130.70 on Tuesday. The stock has an 87 Composite Rating. Its EPS Rating is 85.
Choice franchises more than 7,000 hotels around the world, including for chains like Comfort Inn and Econo Lodge.
Other travel stocks, like Booking Holdings and Airbnb, popped initially last week following their earnings. But they have since given up those gains.
