Marriott, Hilton among downgrades as Citi dims view of lodging
Michael M. Santiago

Citi shifted to a Neutral rating on both Hilton Worldwide (NYSE:HLT) and Marriott International (NASDAQ:MAR) from Buy to Neutral as the bank tempered its view of the lodging space. 

âWe modestly reduced our exposure to lodging in our model portfolio given slightly more defensive positioning overall, although we remain Overweight the sector,â a team of analysts at the bank said on Wednesday. âRates have generally surpassed pre-pandemic levels, while occupancy continues to trail.â

The analysis indicated an overall rosy view of the hotel industry, but noted risks related to an expected recession in 2023 and the potential emergence of new COVID variants. Further, valuations for both Hilton (HLT) and Marriott (MAR) at present balances the risk/reward as comparisons grow increasingly difficult into next year.

That said, the bank moved to upgrade an underappreciated hotel name in Playa Hotels & Resorts (PLYA) based upon its âattractive valuation, recent successful debt refinancing, and relatively easy comparisons in 2023.â The team moved their rating from Neutral to Buy on Wednesday. 

Shares of Hilton Worldwide Holdings (HLT) and Marriott International (MAR) slid in premarket trading while Playa Hotels (PLYA) stock rose 2.45%.
Dig into Marriottâs latest presentation on travel trends.