Market Overview

Analyst: Alternative Accommodation Leaders Will Surpass Top Hotel Chains Volume By 2021

Share:
Analyst: Alternative Accommodation Leaders Will Surpass Top Hotel Chains Volume By 2021
Related
Benzinga's Top Upgrades, Downgrades For January 9, 2019
A Peek Into The Markets: US Stock Futures Gain, Crude Oil Up Over 2%
Expedia Is an Excellent Momentum Play (GuruFocus)
Related EXPE
8 Biggest Price Target Changes For Wednesday
Benzinga's Top Upgrades, Downgrades For January 9, 2019
Expedia Is an Excellent Momentum Play (GuruFocus)

The visibility of the "alternative accommodations" space has gained popularity with the rise of Airbnb and eventually forced major hospitality players to follow suit.

Guggenheim says the idea is "going mainstream fast," with analyst Jake Fuller estimating the marquee alternative platforms will do more volume than the top hotel chains by 2021 and is growing at over four times the pace. Alternative accommodations may have once been hard to find, trust or book, but Fuller says this changed with the major players on board.

Going Mainstream

The analyst says the three major alternative platforms -- Airbnb, Expedia Group Inc (NASDAQ: EXPE) and Booking Holdings Inc (NASDAQ: BKNG) -- should combine for roughly $60 billion in bookings and $7 billion of revenue in 2018. This growth will also provide a sustained boost for online travel agencies and could eventually come at the expense of the hotel industry.

“Evolution of the category has long been seen as a potential risk to the hotel chains, but that risk is hard to quantify,” Fuller wrote in a Dec. 17 note. "Alternative Accommodations should help OTAs sustain double-digit growth despite slowing growth in traditional hotel volume, but on the other side we see alternatives potentially hitting hotel industry growth by around a point over the next several years."

Size And Scope

The analyst says Airbnb is the category leader, but Booking Holdings and Expedia have a solid position in alternatives. Fuller rates Bookings with a Neutral rating. He lists Expedia as a Buy with a $160 price target and remains his "Best Idea."

Collectively, these three companies have over 10 million unique alternative rooms, outpacing the 2.4 million combined total rooms of Hyatt Hotels Corporation (NYSE: H), Hilton Hotels Corporation (NYSE: HLT) and Marriott International Inc (NASDAQ: MAR), which Fuller says effectively rivals the marquee hoteliers on some measures. The analyst has Hilton, Hyatt and Marriott at a Neutral rating.

The analyst says room nights in alternative accommodations are growing at 32 percent, compared to OTA hotel rooms night growth of 10 percent and hotel chain room night growth of 7 percent.

Related Links:

Will Short-Term Rentals Kill The Timeshare Industry?

A Desire To Disconnect: How Urbanization Is Driving The Need To Explore Nature

Latest Ratings for BKNG

DateFirmActionFromTo
Jan 2019JefferiesDowngradesBuyHold
Jan 2019Morgan StanleyDowngradesOverweightEqual-Weight
Nov 2018Wells FargoUpgradesMarket PerformOutperform

View More Analyst Ratings for BKNG
View the Latest Analyst Ratings

Posted-In: Airbnb Guggenheim Jake FullerAnalyst Color Initiation Travel Analyst Ratings General Best of Benzinga

 

Related Articles (EXPE + BKNG)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
MDRXKeyBancUpgrades0.0
ANETNomuraUpgrades260.0
CNPRBC CapitalUpgrades34.0
FISVOppenheimerUpgrades88.0
FNDUBSUpgrades37.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Citron Sees Big Upside In Aphria, Says 'The Bidding War Is On'

Mid-Afternoon Market Update: Crude Oil Tumbles 7%; Navistar Shares Rise Following Strong Q4 Results