Hospitality Industry Weathers China Currency Devaluation

Recent stock reports show minor down trending in the hospitality industry in the weeks following China's currency devaluation when compared to industries such as commodities, oil companies, and those industries involved with foreign currency and marketing products to China.

A Look at a Few Major Hospitality Groups

We looked at a few of the major publically traded timeshare companies to get an idea of how their stocks are trending, comparing today's rate to one month ago. Today (August 24) the S&P 500 was down 3.94 percent compared to the Friday before.

August 24 July 24

Starwood         70.53            81.89

Wyndham  74.75 83.06

Hilton 23.88 27.90

Bluegreen/BBX Capital   15.77 15.86

Though the industry is experiencing some of the effects of the overall economic conditions, it's typical of other mainstream businesses and much less than those companies more directly involved with China.  

The China Effect

To give you a little idea about how China's devaluation of their currency affects us all we consulted, "A country's economy and is currency is impacted by the flow of funds between countries. The more money leaving a country, the weaker the country's economy and currency. Countries like China who predominantly export physical goods or services continually bring money into their countries. This money can be reinvested to stimulate the financial markets within the country." China has historically kept tight control of its currency with favorable exchange rates boosting exports and manufacturing over time, and forcing the U.S. government put up with China's artificially lowered rates.

Industry in a Good Position

The hospitality industry is in a good position to weather this current affront from China. Our industry has grown exponentially over the past few years as the economy improved. But also largely due to nature of the industry. We offer joy, fun, comfort, relaxation and entertainment. We offer the ability to experience other countries and other people, and the ability to adventure away from our everyday lives. What other industry can claim to do all that? 

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