Hilton Worldwide Holdings Inc., like most of the hotel industry, has had a terrible year. But by one metric, the company is faring well: its share price.

The stock climbed Thursday, eking out a 0.3% gain for the year as investors bet that Covid-19 vaccines will unleash a surge of pent-up demand for lodging. The shares have more than doubled since mid-March — a surprising vote of confidence for a company enduring perhaps the worst year in its century-long history.

The company temporarily shuttered nearly 1,000 hotels in the early days of the pandemic, furloughing thousands of employees. In the first nine months of 2020, revenue plummeted more than 50% from a year earlier. And Hilton was forced to raise cash through bond issues and loyalty-points sales to shore up its finances for the lean times ahead.

Now, as Covid-19 shots get distributed, investors are betting that newly vaccinated travelers will set out on vacations, and that corporate road warriors and meeting planners are a step closer to booking rooms again.

They’re also wagering that Hilton will benefit from industry consolidation that typically happens during downturns, and that cost-cutting during the worst months of the pandemic will translate to better margins when business bounces back.


Source: Bloomberg