COVID-19: World’s five largest hotel chains lose $25bn in market cap
The five largest hotel chains in the world are Wyndham Hotels and Resorts, Choice Hotels International, Marriott International, Intercontinental Hotels Group, and Hilton Worldwide Holdings.
As the economic effects of the COVID-19 pandemic spread across the entire world, the hotel industry has been among the hardest hit market sectors. New data presented on Wednesday by StockApps.com, a London-based media platform providing financial education, shows the world's five largest hotel chains have lost a combined market capitalisation of $25.2 billion so far in 2020 due to the devastating impact of the pandemic.
The five largest hotel chains in the world are Wyndham Hotels and Resorts, Choice Hotels International, Marriott International, Intercontinental Hotels Group, and Hilton Worldwide Holdings. According to the StockApps report sent to Financial Nigeria, the combined market capitalisation of the five hotels hit $79.2 billion in September 2020. This figure is $25.2 billion less than the total value of their stocks at the beginning of 2020.
To curb the spread of coronavirus, countries imposed various measures, including lockdowns, physical distancing, and travel and mobility restrictions. All these measures resulted in temporary closure of many hospitality businesses. The businesses that were allowed to continue to operate experienced a significant decrease in demand.
Wyndham Worldwide – the biggest hotel chain in the world by the number of hotels – lost almost $3 billion in market cap between December 2019 when the figure stood at $5.89 billion, according to Yahoo Finance data, and March ending when the value of its stocks dropped to $2.93 billion. Per StockApps report written by its editor, Jastra Ilic, Wyndham owns 8,092 hotels globally.
Following the easing of travel restrictions in the last three months, the combined value of stocks of the American hotel and resort chain rose to over $5 billion in September. Despite the recovery this month, the company still has a deficit of $870 million compared to the total value of its stocks last December.
The second-largest hotel chain globally, Choice Hotels International, lost $440 million in market cap amid the coronavirus crisis, said StockApps. During the last nine months, the value of stocks of Choice Hotels International – which owns 7,118 properties – dropped from $5.76 billion to $5.32 billion.
Marriott International, the third-largest hotel chain with 5,974 hotels in more than 110 countries, witnessed the most significant drop in market cap since the beginning of the year. Last December, the combined value of stocks of the Washington-based corporation stood at $49.51 billion. The company's market cap recovered to $33.86 billion in September – representing a 31 per cent plunge since the beginning of 2020 – after dropping to $24.25 billion at the end of June.
British multinational hospitality company, Intercontinental Hotels Group, ranked as the fourth largest hotel chain globally, with 5,070 hotels across nearly 100 countries, has seen its market cap drop from $12.3 billion in December 2019 to $6.2 billion in March this year, and then risen to $9.7 billion in September. The latest figure still represents a 21 per cent decline compared to the end of last year.
The total value of Hilton Worldwide Holdings, the fifth-largest chain of hotels globally by the number of hotels, dropped by $5.66 billion since the beginning of 2020. In December, according to StockApps, the market cap of the hotel group stood at $30.94 billion. The latest statistics shows the American company’s market cap at $25.28 billion in September, representing an 18 per cent fall since the beginning of the year. According to StockApps, Hilton Worldwide generated around $9.45 billion in revenue last year.
Stock markets across the world have been nervous this week over fears of renewed lockdown measures in Europe as a second wave of COVID-19 looms. Nearly 32 million people have been infected by the virus, which originated in China in December 2019. The new coronavirus has killed 978,108 people as of September 23rd, according to data provided by Worldometer.
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