Visible Alpha Consumer Services

It was no surprise that hotels were among the “social distance losers” during the pandemic. When lockdowns went into effect, reservations were canceled, properties shuttered, and staff sent home. With uncertainty hanging in the air, hotel profitability took a massive hit, falling 34.3% in 2020 – the worst of any industry except for airlines, which fell 58.8%. [1]

However, since the spring of 2020, hotel stocks have rebounded sharply on investor optimism over a faster economic reopening. Shares of Wyndham Hotels & Resorts (NYSE:WH) increased 160%, for example, while Marriott International Inc.’s (NASDAQ:MAR) stock rose 100% since April 1, 2020. [2]

As recovery from the pandemic has accelerated in some markets, analysts have revised expectations for hotels upwards, particularly in China and the U.S. Analysts expect the industry’s recovery will be uneven, however, given lingering challenges stemming from the pandemic.

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The hotel industry is facing headwinds caused by the Covid-19 pandemic, which brought leisure and business travel to a virtual standstill in the first half of 2020. Now, as countries begin lifting travel restrictions after some signs of controlling the virus, there is some optimism in the market that pent-up demand to travel might be underestimated. Nevertheless, as of now Wall Street analysts do not expect large hoteliers will see a full recovery in occupancy before 2022, according to Visible Alpha consensus.

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On April 21, Netflix reported exceedingly better-than-expected net new subscribers in their fiscal 1Q20 as COVID-19 induced lockdowns confined people to their homes and spurred demand for their streaming content. Well-timed hits like “Tiger King” and “Ozark” kept Netflix relevant on social media as many shelter-in-place ordinances began, and all told Netflix signed up 15.7M new subscribers in the quarter.
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Roku’s impressive growth to date has been driven by the cord-cutting trend, a growing number of streaming services and increased investment in original programming. The platform generates sales by promoting streaming services, earning a portion of subscription revenue when customers sign up for new services, and when customers view ads on Ad-supported channels on their platform.

Growth Drivers Peaked

Despite the launch of new streaming services like Disney+ and Apple TV+, analysts project decelerating growth in most of Roku’s key drivers. Slowing growth expectations are largely being attributed to rising competition of alternative streaming hardware and smart TV operating systems, a lack of new OEM partners, and a longer timeline for international expansion. In addition, due to a new feature which prompts users to confirm they’re still watching a channel after a period of no engagement, the company also expects streaming hour growth to decline.

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