Hospitality Stockwatch – April 2024

Authors
Arun Upneja, Ph.D. MBA, Dean, Boston University School of Hospitality Administration
Steve Kent, Ph.D., CFA, Assistant Professor, Molloy University-School of Business

Winners and Losers 

Just a few weeks ago we noted how the stock market was off to a good start in 2024 and that maybe we would see a rerun of the 2023 show.  Even though the past 30 days were solid (S&P 500 up 2.3%) and year to date we saw an exceptional start (S&P500 up 10.8%) it feels like the tone shifted toward the end of the month. 

The premise of outperformance in 2024 reminds me of a scene from the film, “Miss Congeniality,” (2000) starring Sandra Bullock, where one of the contestants was asked to describe her perfect date. She responded, “I’d have to say April 25 because it’s not too hot, not too cold. All you need is a light jacket.” Scene link  

Market participants thought they too could wear “a light jacket” as they were hopeful the economy would keep on chugging along but not enough to reinflate prices.  In this scenario, the Federal Reserve would start to cut interest rates, which would push the market higher.  However, towards the end of the month, we began to see a stronger employment trend and slightly higher inflation indicators.  

Rather than deciding about where the overall market seemed to be heading, it seems like hospitality and tourism investors continue to “stick with their knitting.” Year-to-date only five of the 18 subsectors we analyze outperformed, and very few have reversed course over the past 30 days.   

In essence, the subsectors which started strong continued on this path in March.  One exception was car rental with both Avis and Hertz under pressure in 2024 but showing a bit of bounce back the past 30 days.  Selling used cars into a moribund market, as higher interest rates slowed purchase and plus a retreat from electric vehicles led to write-downs on their assets. The stock seems to be bouncing along the bottom and an expectation of new strategies may lead to better operating performance. 

Click here to download Hospitality Stockwatch – Current as of April 1, 2024

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