Bank of America says this hotel stock will be a winner because of the World Cup

Bank of America Highlights Hotel Stock as Strong Opportunity Ahead of World Cup-Driven Demand

Imagine planning a big party, and you know lots of friends will come because there’s a huge event in town. That’s how hotels feel when big events like the World Cup come around—they expect more guests and more money. This matters to investors because hotel stocks, like InterContinental Hotels Group (IHG), can get a boost when travel picks up.

Why Investors Should Care

When more people travel, hotels make more money. If you own or are thinking about buying hotel stocks, these big events could help your investment grow. It’s like planting seeds before a rainstorm—you want to be ready before things start booming.

Bull Case: Reasons to Be Positive

  • World Cup Boost: Bank of America thinks the 2026 FIFA World Cup in the U.S. will help IHG’s business, possibly raising revenue per available room (RevPAR) by 0.5% to 2%. That’s a solid jump just from one event.
  • Higher Price Target: The bank now sees IHG shares going up to $156, about 11% higher than where they are now.
  • Growth in China: IHG’s hotels in China are doing better than many local competitors, with a stronger brand and more loyal customers.
  • Expanding Fast: IHG is opening more hotels. Its net unit growth is expected to speed up to 4.8% next year.
  • Extra Income Streams: IHG makes money not just from rooms, but also from things like credit card deals and branded residences.
  • Strong Finances: The company has a healthy balance sheet and enough cash to keep buying back its own shares, which can help boost the stock price.

According to Statista, global hotel industry revenue hit $950 billion in 2023, showing just how big this market is.

Bear Case: Reasons to Be Cautious

  • Recent Weakness: The U.S. hotel sector has been slow, with growth in RevPAR down about 1% this year.
  • Short-Term Challenges: Experts think the first part of 2026 could still be rough for U.S. hotels before things pick up in the spring and summer.
  • Competition: Online travel sites and new tech (like AI-powered booking) could make it harder for traditional hotel companies to keep growing fast.
  • Event Risk: If big events like the World Cup don’t bring as many travelers as expected, hotel stocks could miss out on the hoped-for boost.
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Historically, major sports events can help local economies, but results vary. For example, the 2018 FIFA World Cup in Russia brought in over 3 million visitors, but not every host city saw the same benefits (ResearchGate).

Investor Takeaway

  • Keep an Eye on Big Events: If you own hotel stocks, watch how major events like the World Cup could impact travel and bookings.
  • Diversify: Don’t put all your money in one sector. While hotels could do well, balance your portfolio with other types of stocks.
  • Watch for Tech Changes: New technology in travel booking could change the game for hotel chains. Stay updated on how companies like IHG adapt.
  • Look Beyond the Hype: Big events can help, but don’t forget about the basics—steady growth, strong brands, and financial health matter most in the long run.
  • Review Company Reports: Check IHG’s quarterly updates for signs of stronger bookings, loyalty program growth, and how they’re handling competition.

For the full original report, see CNBC

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