One of the sectors that is often overlooked by investors is the hospitality sector. Travel and leisure is a multi-billion industry that is made up of lodging companies, tour operators, airlines, casinos, cruise ship operators, etc. The tourism sector is booming in emerging markets. Even in the recession-hit developed world, countries such as France, US and Spain continue to attract millions of foreign visitors each year who stay at hotels, resorts and other facilities. Many of the foreign companies in the lodging industry are listed in the OTC markets. In this post lets take a quick look at a few of them.
1. Genting Malaysia Berhad (OTC: GMALY) is part of the Genting Group which is a leading Malaysian multinational corporation. Genting Malaysia “is involved in the leisure and hospitality business and its activities cover theme parks, gaming, hotels, seaside resorts and entertainment. The jewel of its crown is Resorts World Genting, a premier integrated family leisure and entertainment resort at the peak of Genting Highlands that attracted 19.5 million visitors in 2009.
The company also owns and operates two beautiful seaside properties called Awana Kijal Golf, Beach & Spa Resort in Terengganu (on the east coast of Peninsular Malaysia) and Awana Porto Malai in Langkawi (off the west coast of Peninsular Malaysia).”
Resorts World Genting outside of Kuala Lumpur is a major tourist attraction for Chinese and other Asian visitors. The ADR currently has a 3.35% yield and is up about 5% YTD.
2. UK-based Intercontiental Hotels (IHG) is a holding company that owns the InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Holiday Inn Hotels & Resorts , Holiday Inn Express, Staybridge Suites, Candlewood Suites and Hotel Indigo brands with 4,438 properties worldwide. The company has a $4.9B market cap and the dividend yield is 1.52%.The share price has grown by 19% so far this year.
3. Shangri-La Asia(OTC: SHALY) is a Hong Kong-based company that owns and operates hotels under the ‘Shangri-La’, ‘Traders’, ‘Rasa’, ‘Summer Palace’ and ‘Shang Palace’Â brand names. The Shagri-La brand is a top-quality brand in many Asian markets. The ADR stock appears to be traded very rarely.
4. Club Mediterranee (OTC: CLMDY) runs the upmarket all-inclusive resort villages under the “Club Med” brand in France and other countries. Originally the company focused on couples who wanted to have a good time in their resorts at exotic locations. However according to a recent story in the Journal, the company is moving away from that strategy and plans to focus on all types of guets. In June, Club Med shares rose strongly after Chinese conglomerate Fosun International bought a 7.1% stake in the firm.
5.UK-based Whitbread(OTC: WTBCY) was originally started as a brewery in the 1800s. However the company sold off its liquor business a few decades ago and entered the lodging sector.Today Whitbread operates the Premier Inn hotel chain, restaurants and the Costa Coffee stores mainly in the UK. The highly popular Premier Inn hotel brand operates mostly in the low price range hotels category. There are 588 Premier Inn locations in the country.In addition the company also operates one hotel in Dubai, Ireland and is planning to open a hotel in the city of Bangalore, India.Costa Coffee stores can be found not only inside malls and other places but also in highway service stations. Both Costa Coffee and Premier Inn have lots of potential for growth. The stock does not pay a dividend.
