Real estate has been one of the worst-performing parts of the stock market during the COVID-19 pandemic, and hotel real estate investment trusts, or REITs, are a big reason. As the pandemic worsened, both leisure and business travel ground to a halt, and hotel REITs got crushed as a result. Many are still trading for less than half of their pre-COVID share prices.

However, there could be long-term value for patient investors with a relatively high level of risk tolerance. Two particularly interesting hotel stocks to buy for the long term are group-focused hotel REIT Ryman Hospitality Properties (NYSE: RHP) and Host Hotels & Resorts (NYSE: HST). Let’s take a look at both companies and which might be the better buy right now.

Ryman really needs group events to come back

Ryman Hospitality Properties isn’t just a hotel REIT. It owns five massive hotels under the Gaylord brand, which focus on conferences, conventions, and other large group events. And the company owns a portfolio of entertainment properties including the Grand Ole Opry and Ryman Auditorium performance venues in Nashville.

As you might imagine, these are tough businesses to be in as of late. Group events simply aren’t happening right now, and it’s fair to assume that the industry won’t return to normalcy until 2021 at the earliest. Ryman’s hotels have reopened for the most part but are having to pivot to leisure travel in the near term and are likely to run at very low occupancy levels. And the entertainment venues are closed for performances for the foreseeable future.

There’s light at the end of the tunnel, however. One good part of the group hotel business is that the same groups tend to return year after year and book their events well into the future. Ryman has successfully rebooked more than 450,000 canceled room nights and the company actually has more nights booked in 2021 and 2022 than it did at this point last year.

In short, Ryman has some of the most desirable locations for group events in the world and some iconic entertainment properties. Long-term, they should be just fine — but there’s going to be some short-term pain.

Host Hotels & Resorts is better positioned to capitalize on leisure travel

Host Hotels & Resorts is the largest hotel REIT in the market and operates a portfolio of 80 hotels with nearly 47,000 rooms, most of which are in the luxury or upper-upscale categories. Properties in the portfolio are operated under some of the best-known brands in the industry, such as Marriott (NASDAQ: MAR), Grand Hyatt, Hilton (NYSE: HLT), Hyatt Regency, Ritz-Carlton, and Westin, among others.

Aside from the size of its portfolio, the biggest difference from Ryman is that while Host certainly has a large amount of group business, it is far more focused on leisure and business travel than Ryman is. In fact, non-group travel made up 65{143106009d8b87d45252e1fd973f0c0835ad3aabba3679e828c3cd83539ae06c} of Host’s room revenue in 2019. This should help the company’s business bounce back faster in the near term. Just to name one statistic: Host’s average occupancy in its 45 hotels that were open in May was just over 15{143106009d8b87d45252e1fd973f0c0835ad3aabba3679e828c3cd83539ae06c}. But Ryman’s hotels were closed until June. By July 7, 59 of Host’s hotels had reopened.

Host has a strong presence in some major leisure travel markets, such as Florida, San Diego, and San Antonio, just to name a few. And unlike Ryman, it doesn’t have to quickly pivot its focus to capitalize on the return on leisure travel in summer 2020.

How have these stocks performed?

While Ryman’s business certainly has suffered more as a result of the pandemic, it also trades for a steeper discount. So far in 2020, Host Hotels & Resorts has dropped by about 44{143106009d8b87d45252e1fd973f0c0835ad3aabba3679e828c3cd83539ae06c} while Ryman has lost 64{143106009d8b87d45252e1fd973f0c0835ad3aabba3679e828c3cd83539ae06c} of its value.

Which is the best buy now?

I’d be comfortable calling Host Hotels & Resorts the “safer” play of the two. It has unmatched scale in the hotel REIT space and has a diverse portfolio of assets that isn’t heavily dependent on group events coming back. On the other hand, Ryman has a more impressive collection of assets and it stands to benefit more once its core source of business rebounds. I don’t necessarily think you’ll go wrong with either hotel REIT as a long-term investment, but if you’re a patient investor with a relatively high risk tolerance, I’d suggest putting Ryman on your radar as the pandemic rages on.

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