In the aftermath of the Covid-19 pandemic, consumers wanted to get out of the house and hit the road. Pent-up demand for business travel was also unleashed. As a result, hospitality stocks have had a good run.
How long will that run continue? Recent data from the Bureau of Labor Statistics indicate that hiring in the hospitality sector continues at a steady rate. Indeed, job creation in that sector is slightly ahead of last year's pace, according to the monthly BLS figures.
Source: Bureau of Labor Statistics
It's notable that the cost of a hotel stay has increased over the past few years despite competition from Airbnb (ABNB) and similar websites. Due to its prominence, I think it's fair to include that company's chart in this collection.
Source: TradeStation
Airbnb's chart has vastly improved after a recent pullback. The stock bounced from a 61.8% Fibonacci retracement in mid-August (point A), then vaulted higher after it was announced that Airbnb, along with Blackstone (BX) , would be added to the S&P 500 on Sept. 18 (point B).
Where is Airbnb, which Real Money technical analyst Bruce Kamich reviewed on Sept. 5, headed next? The stock should soon challenge its 52-week closing high of $153.33 (point C), set on July 28. That goal is just 4% away from Monday's closing price. Grade: B
Next up is International Hotels Group (IHG) . The parent company of Holiday Inn, Crowne Plaza and other well-known hospitality brands is trading just below its all-time high.
According to IHG's chart, the stock will be trading at a fresh high in the near future. IHG has formed an ascending triangle pattern (black lines). This bullish formation projects the stock to the $82 area.
Source: TradeStation
In addition, IHG's moving average convergence divergence (MACD) indicator is on the cusp of a buy signal (arrow). Grade: A
Marriott International (MAR) is also flirting with an all-time high. Since late August, Marriott has entered a low-volume (shaded yellow) consolidation phase as it digests recent gains. This stock is trading well above its 50-day (blue) and 200-day (red) moving averages. Grade: A-
Source: TradeStation
On the opposite end of the spectrum is Hyatt Hotels (H) . Over the past two sessions, Hyatt has formed a bearish engulfing pattern (shaded yellow). This Japanese candlestick pattern is considered a precursor to a move lower.
Source: TradeStation
On Monday, the stock closed at a two-month low as it changed hands at its highest volume in a month (arrow). Hyatt also closed below its 200-day moving average (red) for the first time this year. Grade: D
Bottom line: The hospitality sector should continue to run, but investors need to be selective. IHG and Marriot currently have the best charts in the sector.
