: Playa Hotels & Resorts stock drops after double downgrade at BofA, amid slowing leisure travel demand

Shares of Playa Hotels & Resorts NV PLYA dropped 6.6% toward a four-month low in afternoon trading Monday, in the wake of a double downgrade by BofA Securities analyst Shaun Kelley, who recommended investors sell. The stock has tumbled 13.7% amid an eight-day stretch in which it has declined seven times. Kelley swung to a sell rating from a buy. After the operator of hotels in Mexico and the Caribbean exceeded even Kelley’s “blue-sky” expectations, the company now faces a number of operating risks, including normalizing prices, consumers pulling back or trading down, growing supply and seasonality as hurricane season nears. That comes in an environment in which leisure travel demand has flattened out after surging “pent-up demand” for vacations post-COVID. So far in the second quarter, Syth said resort revenue per available room (RevPAR) has dropped 3% from a year ago while luxury RevPAR is down 1%. Playa’s stock has still rallied 14.6% year to date while the S&P 500 SPX has gained 13.1%.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.