LIVE MARKETS-Hotel stocks to outperform consumer sector in 2026 say Jefferies

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HOTEL STOCKS TO OUTPERFORM CONSUMER SECTOR IN 2026 SAY JEFFERIES

Jefferies have a big look at the hotel sector out on Friday, which generated a 2.5% bounce in InterContinental Hotel Group shares, and in which they argue both structural and business model changes mean hotels should outperform the wider consumer sector next year.

The structural points are what one might expect, but are still worth reiterating.

They say the post-pandemic rebound has been sustained well beyond 'revenge travel', as consumers shift spending from goods to experiences, governments invest, and the global middle class expands.

But also they say there are a few shifts going on, the traditional key metric of "revenue per available room" is mattering less. Instead, the primary driver of revenue growth is going to be simply building new units.

They are also watching ancillary fees, things like loyalty programmes, co-branded credit cards as well as more traditional things like franchising fees.

This is one factor behind their upgrade of IHG IHG.L , as they see scope for it to raise the 15% of its total fees it makes from these extra bits at present to around the 25% of Mariott and Hilton.

Their top pick however, is Accor ACCP.PA, Europe's biggest hotel group. The company, which operates the Ibis and Novotel brand among others, has high-end exposure that could help it re-rate towards U.S. peers. The bank downgrade Whitbread WTB.L because it suffers from its exposure to Britain.

Its shares are down 1.5%.

Deutsche also have a note on leisure stocks out they upgrade Accor to buy and have IHG and Whitbread as holds.

(Alun John)

EARLIER LIVE MARKETS POSTS

STRONG START CLICK HERE

EUROPE BEFORE THE BELL: BACK NEAR RECORD HIGHS CLICK HERE

MORNING BID COPPER EDGES PAST SILVER TO TAKE GOLD CLICK HERE