Hospitality Stockwatch – January 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
As we exit 2023, we see many encouraging signs to look forward to as we head into 2024!
One theme that has dominated performance this past year is that just a few mega-cap tech stocks drove the broader indices over the past few years. In 2021, the mega-cap tech stocks that steered the 2021 outperformance, decelerated in 2022, and then came racing back in 2023.
In recent years, we have merged from FANG to FAANG to FAAMG to GAMMA (all the acronyms for the big tech stocks that moved the market with the letters based on some variation of Facebook, Amazon, Netflix, Google, Apple, Meta Platforms, and Microsoft). Finally, in 2023, we shifted into high gear to the “Magnificent Seven” – Google parent Alphabet, Apple, Meta Platforms, Microsoft, Amazon, Tesla, and Nvidia.
The impact of these big-name stocks is that they are only seven of the 500 stocks in the market cap-weighted S&P 500, but account for roughly 30% of the value. As a group, they were up about 75% in 2023 while the other 473 were up only 12%. The S&P 500, a broad measure of the market was up close to 25% for the year, so can see how they dramatically influenced performance.
We saw a similar trend in the 120 stocks and 18 subsectors in the Boston University Hospitality Stockwatch. The biggest market cap stocks in the largest cap sectors showed outperformance. If you bought the top 20 stocks based on market cap, you would have been up roughly 50%. Interestingly, long-term industry leaders such as Carnival (+133%), Royal Caribbean (+166%), Marriott (+53%), Hyatt (+47%), Hilton (+46%), and Chipotle (+67%), along with online travel and gaming, were some of the biggest movers to the upside in 2023. In contrast, small-cap SPACs and restaurant stocks were down or underperformed.
As we look ahead at 2024, we hope to see more heads in beds, feet in sheets, time to dine, and investors hitting the jackpot!
Click here to download Hospitality Stockwatch – Current as of January 1, 2024