What's going on?

Two major investment firms agreed to buy hotel operator Extended Stay America on Monday, in hopes that getting into bed together will lead to a good time.

What does this mean?

The hotel industry hasn�t exactly been doing well recently, but investment firms Blackstone and Starwood seem to think it�s only a matter of time before travel � and by extension hospitality � picks back up. So much so, in fact, that they offered to pay $6 billion for Extended Stay � 15% more than the company was worth on Friday, and the biggest sale the hotel sector�s seen since the pandemic began. And there are signs they�re right to be so optimistic: Friday was the busiest day for American airlines since March last year.

Why should I care?

For markets: Affordability and long stays are the key.�

Extended Stay has something else working in its favor: the hotel chain offers, well, extended stays at reasonable prices, meaning it tends to attract guests no matter how the economy�s doing. In fact, it managed to fill 75% of its rooms on average last year, even as the rest of America�s hotels only filled 44% of theirs. That might be one of the reasons why its shares have gained 30% since February last year, compared to just 2% and 12% for giant rivals Marriott and Hilton respectively.

The bigger picture: You might�ve missed your chance with the travel sector.

Get the sanitizer, because the travel bug seems to have spread across the Atlantic: one major index of European travel and leisure stocks erased all its pandemic losses and reached an all-time high on Monday. That�s not to say there are no cheap stocks in the travel sector any more, but they might be cheap for good reason: airline stocks, for example, are still some way off pre-pandemic highs, but they�re burning through cash and have a lot of government debt to repay.