Shares of travel-related companies have been battered recently. Airlines, cruise companies, hotels and online travel agents have seen drops of 10-25% as investors fret about the impact of the Covid-19 coronavirus.

However, not all travel-related companies are created equal. Some businesses such as airlines are capital intensive. Other businesses such as Macau casinos are largely dependent on Chinese tourism. Some companies such as Hilton Worldwide Holdings (HLT) are capital light with little exposure to the Asia Pacific region.

At a current market capitalization of $28 billion and a forward PE of 25, HLT is still too expensive for a late cycle company. However, you might want to add HLT to your watchlist. It is possible that HLT shares will fall in unison with the entire travel industry even though HLT has little China exposure. Furthermore, HLT has a growth pipeline that almost guarantees that the company can increase earnings 10% per year for several years into the future. If you can acquire shares at a 15-20% discount to current prices due to the Covid-19 coronavirus, this is the type of compounder you want to own for the long term.

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