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In this article, we discuss the top 10 leisure companies in the world in 2022. You can skip our comprehensive analysis about the leisure industry and go directly to Top 5 Leisure Companies in the World.
The onset of coronavirus had wreaked havoc on most businesses across the world, but none felt the jitters harder than the global leisure & hospitality industry, with some of its biggest names failing to make it to the top 500 in Forbes’ 2021 ranking of world’s largest public companies.
According to a US Joint Economic Committee report, the leisure & hospitality industry had experienced steady growth from 12.9 million workers in 2010 to 16.9 million at the beginning of 2020. But Covid-19 pandemic disrupted this trend when in April 2020 employment had dropped sharply, reaching levels that had not been seen since the 1980s.
The impact of Covid-19 on leisure & hospitality businesses can be gauged from the fact that the industry made up 40pc of all job losses at the height of the pandemic (February 2020 to April 2020), according to the report.
In 2021, however, the downtrend slowly started shifting mainly due to an overall drop in Covid fatalities which led to ease in travel restrictions across the world, resulting in leisure & hospitality companies seeing considerable improvements in their financials. Although Delta and Omicron variants slowed the recovery in some regions earlier this year, recent leisure spending trends show that it won’t take long for leisure businesses, particularly those operating in the US and Europe, to regain their pre-pandemic market share.
As per Deloitte’s Consumer Tracker, total net leisure spending jumped three percentage points in the first quarter of 2022 compared to -10pc in Q4 2021. This uptick was in part driven by school half-term breaks but also by the loosening, or even the entire removal, of Covid-19 entry requirements in many popular international destinations.
With further ease in restrictions in the offing, analysts predict air travel to soar and demand for both hotels and private rentals to remain strong moving forward.
Credit: Park Hotels & Resorts
According to the US Travel Association’s June report, travel spending ($100 billion) was 3pc more in April 2022 as compared to 2019 pre-pandemic levels. However, overseas visitation was still 43pc below 2019 levels, albeit European markets vastly improved and were down just 34pc of 2019 levels.
As businesses operating in western markets are cautiously making their way back to pre-pandemic levels, the same cannot be said about leisure businesses operating in Asian markets, which remain down largely due to restrictions in individual countries.
An Asian Development Bank (ADP) report published in March 2022 concluded that popular tourist hubs like Hong Kong and Macau – latter being home to some of the biggest casinos owned by US companies, may continue with the downtrend amidst Covid restrictions in vogue in China.
Despite recent travel trends showing improvements in leisure activities across the world, it is safe to say that the industry’s revival, at least in Asia, would still rely heavily on potential lockdowns and restrictions.
With that said, let's take a peek at the world’s top 10 leisure companies in the world in 2022, see how they fared amidst post-pandemic relaxations, and evaluate their operational preparedness to cope with any potential challenges in the near future.
Top 10 Leisure Companies in the World
10. InterContinental Hotels Group PLC (NYSE:IHG)
Market Cap: $9.95 Billion
British hospitality giant InterContinental Hotels Group PLC (NYSE: IHG) operates mainstream, upscale and luxury hotels under various brands across the world.
Like many on this list, IHG cashed in on the reopening of the U.S. and European markets this year, witnessing a steady growth in performance and posting a positive outlook for the future.
The group in its first quarter 2022 results reported a 61pc year-on-year jump in revenue per available room (RevPAR), attaining 82pc of 2019 level.
Among its segments, the group’s Q1 RevPAR for ‘The Americas’ was up 58pc vs 2021 (down 8pc vs 2019) with close to 60pc occupancy rate, while Q1 RevPAR for ‘EMEAA Region’ was up 122pc vs 2021 (down 33pc vs 2019) with occupancy approaching 50pc.
Trading in Greater China, however, continued to be impacted by restrictions put in place to control rising Covid cases. The company’s Q1 RevPAR for ‘Greater China’ segment remained 7pc down as compared to 2021 (-42pc vs 2019) with occupancy at 36pc.
Keith Barr, Chief Executive Officer at IHG Hotels & Resorts, noted that higher occupancy levels (in the US & Europe) was indicative of increased pricing power. In March, IHG hotels in the U.S. achieved leisure rates up by more than 10pc on 2019 levels while rate across the whole of the U.S. business was 4pc ahead.
Citing growth in corporate bookings and a surge in leisure activities as reasons, the company sees further progress in both occupancy and rate in the coming quarters.
Headquartered in Buckinghamshire, England, InterContinental Hotels Group PLC owns and operates a portfolio of hotel businesses across The Americas; Europe, Middle East Asia and Africa (EMEAA), and Greater China. Its hotel brands include Six Senses, Regent, InterContinental, Vignette, Kimpton, Hotel Indigo, EVEN Hotels, HUALUXE, Crowne Plaza, voco, Holiday Inn, Holiday Inn Express, Holiday Inn Club Vacations, avid, Staybridge Suites, Atwell Suites, and Candlewood Suites. IHG currently company operates approximately 6,028 (884,820 rooms) open hotels in more than 100 countries.
9. Carnival Corp. (NYSE:CCL)
Market Cap: $10.41 Billion
Leading the cruise industry resurgence post travel relaxations, US-based Carnival Corporation (NYSE: CCL) seems most eager to get back to 2019 levels, with the company’s biggest brand, Carnival Cruise Line, becoming the industry’s first since Covid to sail its entire fleet in May 2022.
In its recently announced financial statement for Q2 2022, the company reported nearly 50pc increase in revenue growth compared to first quarter 2022, reflecting continued sequential improvement.
For the cruise segments, revenue per passenger cruise days (PCD) for Q2 2022 decreased slightly compared to a strong 2019, whereas onboard and other revenue per PCD for the second quarter of 2022 increased significantly compared to 2019.
CCL’s occupancy in the second quarter of 2022 was recorded at 69pc, an increase from 54pc in the prior quarter.
Total customer deposits increased $1.4 billion to $5.1 billion as of May 31, 2022, from $3.7 billion as of February 28, 2022. Cash from operations turned positive in April and was positive for the second quarter of 2022.
As of June 24, 2022, 91pc of the company's capacity is in guest cruise operation as part of its ongoing return to service.
Carnival Corporation owns and operates cruise ships offering cruises to all major vacation destinations including North America, United Kingdom, Germany, Southern Europe, South America, and Asia Pacific. Its portfolio features Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, P&O Cruises (Australia), Costa Cruises, AIDA Cruises, P&O Cruises (United Kingdom) and Cunard. The company, through a subsidiary, also owns and operates hotels and lodges.
8. Host Hotels & Resorts Inc (NASDAQ:HST)
Market cap: $11.39 Billion
A prominent name in global hospitality industry and REIT, Host Hotels & Resorts Inc. has made giant strides in 2022 after what can be termed as tumultuous couple of years for the company.
For the quarter ending March 31, 2022, HST posted earnings per share of $0.16, topping the consensus estimate of $0.02 by $0.14. Revenue clocked in at $1.07 billion for the quarter (+169pc year-on-year), compared to analyst estimates of $949.39 million. During the same period last year, the company had earned $0.01 earnings per share.
According to HST, improvements were primarily driven by leisure travel, with strong rates at resort properties leading to average room rates of $305.63 for the quarter.
Meanwhile, subsequent to quarter end, the group sold two of its hotels – Sheraton Boston Hotel for $233 million and Sheraton New York Times Square Hotel for $373 million, bringing the company’s total dispositions to $1.4 billion since the beginning of 2021. President and Chief Executive Officer James F. Risoleo termed the development an important step in elevating the company’s EBITDA growth profile.
Host Hotels & Resorts is the largest lodging real estate investment trust and one of the largest owners of luxury and upper-upscale hotels. The company currently owns 73 properties in the United States and five properties internationally, totaling approximately 42,300 rooms. It also holds non-controlling interests in seven domestic and one international joint ventures.
The company's hotels operate in urban and resort markets either as luxury properties under such brand names as Fairmont, Grand Hyatt, JW Marriott, Ritz-Carlton, St. Regis, and The Luxury Collection, or as upper upscale properties under such brand names as Embassy Suites, Hilton, Hyatt, Marriott, Marriott Marquis, Autograph Collection, Pullman, Swissotel, Hotel Van Zandt and Westin.
7. Huazhu Group Ltd (NASDAQ:HTHT)
Market Cap: $12.58 Billion
Unlike some of its rivals in the West, China-based hotel operator and franchisor Huazhu Group Limited has been encountering tremendous challenges at the hands of corona-induced lockdowns across prominent Chinese markets including Shanghai.
According to the company’s unaudited Q1 2022 financials, net loss attributable to Huazhu Group Limited clocked in at RMB630 million ($99 million), compared with RMB248 million for the first quarter of 2021 and RMB459 million in the previous quarter.
The company’s EBITDA for the first quarter of 2022 was negative RMB301 million ($48 million), compared with RMB70 million for the first quarter of 2021 and RMB46 million in the previous quarter.
During the first quarter of 2022, the company’s Legacy-Huazhu business opened 302 hotels, including three leased hotels and 299 manachised hotels and franchised hotels, and closed a total of 140 hotels, including 12 leased hotels and 128 manachised and franchise hotels.
In the second quarter of 2022, Huazhu Group expects revenue to decline 2pc to 6pc compared to the second quarter of 2021 due to the impact of Covid restrictions in China.
Huazhu Group’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, Huazhu directly operates hotels typically located on leased or owned properties. Under the manachise model, the company manages manachised hotels through the on-site hotel managers that Huazhu appoints, and Huazhu collects fees from franchisees. Under the franchise model, the company provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers.
As of March 31, 2022, Huazhu Group has a total of 7,988 hotels or 764,859 hotel rooms in operation under many brands, including HanTing Hotel, Ni Hao Hotel, JI Hotel, Crystal Orange Hotel, Joya Hotel and others.
6. MGM Resorts International (NYSE:MGM)
Market Cap: $12.78 Billion
World's premier gaming company and a name synonymous with luxury entertainment, MGM Resorts International (MGM) owns and operates integrated casino, hotel, and entertainment resorts across the US and in Macau.
Like other US-based leisure & hospitality provides, MGM off late has also witnessed a significant improvement in its books, posting its fourth straight quarter of revenue growth earlier this year after five consecutive quarters of Covid-induced declines.
The company’s Q1 FY2022 earnings surpassed consensus estimates, with consolidated net revenues clocking in at $2.9 billion (+73pc) compared to $1.6 billion in the prior year quarter.
MGM reported positive adjusted earnings per share for the third straight quarter after six consecutive quarters of adjusted losses per share. Analysts had expected the company to report an adjusted LPS for the quarter.
Chief Executive Officer and President Bill Hornbuckle attributed the strong first quarter performance in domestic operations driven by weekend demand and a better mix of business. He sees a robust demand for MGM’s gaming entertainment offerings with the backdrop of increased sports and entertainment programming in the Las Vegas market.
MGM began operations in 1987 as MGM Grand, Inc. and became MGM Mirage in 2000, following the acquisition of Mirage Resorts. With the company’s non-gaming (lodging, food, retail) revenue outpacing gaming receipts, the company over the years shifted its focus from owning and operating resorts and casinos to developing and building real estate in the leisure and gaming industry. In 2010, shareholders voted for MGM Mirage to change its name to "MGM Resorts International".
The company operates through segments including Las Vegas Strip Resorts, Regional Operations and MGM China. Las Vegas Strip Resorts segment consists of Aria, Bellagio, MGM Grand Las Vegas, Mandalay Bay, The Mirage, Luxor, New York-New York, Excalibur and Park MGM. Regional Operations segment consists of MGM Grand Detroit in Michigan; Beau Rivage in Mississippi; Gold Strike Tunica in Mississippi; Borgata in Atlantic City; MGM National Harbor in Maryland; MGM Springfield in Massachusetts; Empire City in Yonkers, New York, and MGM Northfield Park in Northfield Park, Ohio. MGM China consists of MGM Macau and MGM Cotai.
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Disclosure: None. Top 10 Leisure Companies in the World in 2022 is originally published on Insider Monkey.
