Consumers Are Flocking To Wyndham's Hotels, Is A Breakout Coming?

Wyndham Worldwide WYN is currently registering all-time highs in purchase intent (bookings) according to LikeFolio, which specializes in tracking consumer purchasing behavior.

Here's a look at Wyndham brand purchase intent mentions (in green).  This data point tracks the number of times consumers talk about booking a room or staying at any of the company's 20 brands comprising over 8,000 hotels:

As you can see, these mentions are showing extremely strong growth, pushing into all-time highs for the company.  This surge in consumer spending is occurring right as the stock makes new all-time highs and analysts are beginning to say that you should buy Wyndham stock right away.  

Are Wyndham brands consumers happy?

To find out, we look at the consumer happiness level of Wyndham Worldwide in comparison to some of the other top hospitality companies.  

While WYN doesn't have the highest levels of consumer happiness, it never really has.  More luxurious brands, like Hyatt H and Hilton HLT have higher levels of consumer happiness likely because they provide a more upscale hotel stay. Wyndham brands offer a more affordable stay, with less luxuries, at the economy/midscale level.   

This potential upside in consumer happiness is important as Wyndham approaches a split of its company into two divisions in early 2018.  The hotels division will be able to better focus on the consumer experience, creating happier, more loyal customers.

Travel Industry Breakout? 

It's not just Wyndham seeing an updraft in consumer spending.  In fact, when we look across the travel industry, we see several names following a similar pattern of purchase intent mentions at or near all-time highs.

Southwest Airlines Co. LUV and Alaska Air Group, Inc. ALK are two airlines that recently hit new highs in purchase intent data.  Carnival Cruise Lines CCL is also powering forward as earnings over the next few years are expected to increase by 61.29%, indicating a highly optimistic future ahead.  Despite economic and political uncertainty in parts of the world, overall demand for travel and hospitality services continues to rise, a trend we are seeing consistently in the LikeFolio consumer data.

Playing Wyndham from here

Wyndham is set to announce their earnings on October 25, 2017.  Based on 4 analysts' forecasts, the consensus EPS forecast for the quarter is $2.01, which would be an increase of 12 cents/share over the same quarter a year ago.  

Historically, LikeFolio data has been a leading indicator of Wyndham (and other travel industry stocks) by 2-4 months, which means we could be in for a serious run to all-time highs as we turn the calendar page into 2018…

On the LikeFolio app, we will continue to alert app users to shifts in consumer data for these stocks, as well as some big opportunities currently forming in other consumer-facing industries.