Hotel REITs: Is There Really No Good News?
The hotel sector has been devastated by the impact of COVID-19 as countries around the world hit the economic pause button to slow the spread of the new virus. Hotel real estate investment trusts (REITs) have seen their shares get cut in half, or worse, in 2020. Although countries around the world have begun the reopening process, investors shouldn't get too excited when it comes to hotels. There's still a huge amount of pain in the sector, and a long way to go before there's anything remotely close to a recovery.
Hotels are unique in the property space because they have leases that are, effectively, one night long. That means that these properties quickly feel the brunt of economic downturns, since reservations can be canceled with little to no consequence. It shouldn't be any surprise to find out that hotels, and the real estate investment trusts that own them, have been pummeled by investors as COVID-19 spread across the globe.
Image source: Getty Images
Source Fool.com
