Is Marriott a Good Investment?

PHOTO CREDIT: Marriott

OVERVIEW

Marriott International Incorporation is a company based in the United States. The company owns and operates many hotel chains around the world. The company has over 7500 properties under 32 brands, including Marriott, J.W. Marriott, Ritz Carlton, Courtyard, and many others. The company was founded in 1927.

Why You Should?

  1. Marriott is a great reopening play in an investor’s portfolio. As more people get vaccinated against the virus, consumers will start traveling one again. When this happens, Marriott will see a spike in demand for their lodging services around the world. This will benefit the company’s recovery from this pandemic and will also benefit investors in the company.
  2. Marriott is the largest hotel chain in the world. This will benefit investors in the company as Marriott has an extremely diverse set of properties and hotels. Consumers will flock to these hotels in order to have a consistent experience. This also offers the company with a wide variety of revenue streams. This will benefit the company’s recovery from the pandemic and will also benefit investors in the company.
  3. Marriott has an extremely good brand recognition across the markets that it serves. A Marriott branded hotel represents consistency, quality, reliability, and trust (according to the company). The brand is well-known to corporate travelers and leisure travelers alike. This strong brand recognition will benefit the company and its investors.

Why you Should Not?

  1. Marriott faces tough competition in the hotel industry. Some of these competitors include traditional hotel chains like Hilton and Hyatt. Other companies include Airbnb, Vrbo, and many others. This competition might hurt the company and its investors in the future.
  2. The COVID-19 pandemic has decimated the demand for lodging services around the world. This is because corporate travelers worked from home over Zoom and leisure travelers stayed at home to avoid interaction and getting infected with the virus. This has hurt Marriott as the company had to adapt its business to go through these tough times. This pandemic has also hurt investors in the company.
  3. Marriott relies on corporate travelers to stay at their hotels during the off-season for leisure travelers. However, this pandemic has introduced some new workflows, including Zoom, for corporate travelers to work from the comfort of home. The slow return of corporate travel will negatively impact the company’s recovery from this pandemic.
  4. Companies like Airbnb are more popular for young millennial travelers. Airbnb offers more options for its consumers. The rise of companies like Airbnb might hurt the company’s future growth as millennials turn to this option instead of going to stay at a Marriott hotel.

MY OPINION

I think that Marriott is a decent long-term investment, though there are better stocks to buy. Marriott is a great reopening play in an investor’s portfolio, it remains the world’s largest hotel chain, and it has an extremely good brand recognition. However, tough competition, impacts from the pandemic, a possibility of a slow return of corporate travel, and the rise of Airbnb might hurt the company in the future.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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