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3 Hotel Stocks to Keep an Eye on Amid Industry Headwinds
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The Zacks Hotels and Motels industry is hurt by economic uncertainty, labor shortages and rising wages, as well as dismal occupancy and RevPAR. However, industry participants are concentrating on growth strategies, including expanding their portfolios, converting properties, forging partnerships and enhancing loyalty programs. Industry players, such as Hilton Worldwide Holdings Inc. ((HLT - Free Report) ), Hyatt Hotels Corporation ((H - Free Report) ) and Soho House & Co Inc. ((SHCO - Free Report) ) are likely to benefit from the factors mentioned above.
Industry Description
The Zacks Hotels and Motels industry comprises companies that own, lease, manage, develop and franchise hotels. Some vacation ownership and exchange firms are also part of the industry. Several participants own, construct and operate resorts. Some companies develop lodgesand mobile accommodations, including modular, skid-mounted ones and central amenities that provide long-term and temporary workforce accommodations. Some industry players develop, market, sell and manage vacation ownership and associated products. A few hoteliers also offer studios, one-bedroom suites, and accommodations to mid-market business and personal travelers.
4 Trends Shaping the Future of the Hotels & Motels Industry
Economic Uncertainty & Slowing Growth: The broader U.S. economy remains a headwind for hotels, with inflation, high interest rates and softening consumer confidence curbing discretionary spending. Leisure demand has cooled from its post-pandemic highs, while corporate travel budgets remain cautious. Many companies are trimming travel-related expenses, leading to weaker bookings in both urban and convention-heavy markets.
Labor Shortages & Rising Wages: Staffing continues to be one of the most significant challenges for hoteliers. Despite wage hikes and added incentives, hotels struggle to recruit and retain enough workers across housekeeping, food service and front-desk operations. Elevated labor costs directly erode profitability, while understaffed properties often compromise service quality, hurting guest satisfaction and repeat business.
RevPAR & Occupancy Declines: According to CoStar, a leading provider of real estate data and analytics, the U.S. hotel industry posted softer performance metrics in early August 2025, with both weeks showing year-over-year declines in RevPAR and occupancy. For the week ending Aug. 9, occupancy slipped 1% to 68.0%, while ADR declined 0.6% to $159.61, resulting in a 1.6% drop in RevPAR to $108.47. In the week ending Aug. 16, occupancy decreased 0.9% to 66.3%, although ADR managed a modest 0.4% gain to $157.51. However, RevPAR still fell 0.5% to $104.50.
Digitalization to Drive Growth: Hotel owners are focused on maintaining the balance between maximizing hotel profitability and driving guest satisfaction. To this end, hoteliers have leveraged mobile and web check-in and mobile key technologies. These hoteliers also increased the use of digital tools to strengthen infrastructure, grow online package sales, enable self-service bookings, make real-time offerings and enhance the overall customer experience. This, along with the emphasis on pricing optimization and merchandising capabilities, will likely help hoteliers capture additional market share.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Hotels and Motels industry is grouped within the broader sector.
The group's Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. The Zacks Hotels and Motels industry currently carries a Zacks Industry Rank #176, which places it in the bottom 28% of the 245 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry's position in the bottom 50% of the Zacks-ranked industries results from a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, analysts are gradually losing confidence in this group's earnings growth potential.
Before we present a few stocks that you may want to keep an eye on, let us look at the industry's recent stock-market performance and valuation picture.
Industry Underperforms the S&P 500
In the past year, the Zacks Hotels and Motels industry has underperformed the S&P 500 and the sector. Over this period, the industry has appreciated 3.8% compared with the sector's rise of 26.6%. Meanwhile, the Zacks S&P 500 composite has rallied 16.2%.
Hotels & Motels Industry's Valuation
Based on the trailing 12-month EV/EBITDA, which is a commonly used multiple for valuing Hotels and Motels stocks, the industry is currently trading at 15.47X compared with the S&P 500's 17.7X. The sector's trailing 12-month EV/EBITDA ratio stands at 10.55X.
Over the last five years, the industry has traded as high as 89.02X and as low as 13.17X, the median being 17.27X, as the chart below shows.
3 Hotels & Motels Stocks to Watch
Soho House: The company’s growth continues to be fueled by the strength of its membership model and strategic initiatives aimed at enhancing member value. Under CEO Andrew Carnie’s leadership, the company has emphasized experiential openings, such as Soho Farmhouse Ibiza, upgrades to existing Houses and more curated cultural programming, all of which strengthen engagement and retention.
SHCO currently flaunts a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for Soho House’s 2025 bottom line suggests a surge of 81.1% from the year-ago period’s actual. SHCO shares have risen 20.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price & Consensus: SHCO
Hilton: The company is benefiting from strong net unit growth, hotel conversions and recovery across international markets. The company’s focus on expanding its luxury portfolio, along with growth in Hilton Honors membership, remains a key positive. Also, its emphasis on a capital-light model and a disciplined capital return strategy bodes well.
HLT presently has a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for Hilton’s 2025 EPS suggests growth of 12.2% from the year-ago period’s actual. HLT shares have jumped 26.9% in the past year.
Price & Consensus: HLT
Hyatt: The company is benefiting from strong leisure travel demand and RevPAR gains in luxury and all-inclusive segments. Also, its focus on unit expansion, acquisitions and asset-light models bodes well. Additionally, brand launches in select service and the ongoing expansion of the World of Hyatt loyalty program enhance the company’s competitive positioning.
H currently carries a Zacks Rank #3. The company’s 2025 top line is likely to witness year-over-year growth of 6%. H shares have declined 3% in the past year.
Price & Consensus: H
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3 Hotel Stocks to Keep an Eye on Amid Industry Headwinds
The Zacks Hotels and Motels industry is hurt by economic uncertainty, labor shortages and rising wages, as well as dismal occupancy and RevPAR. However, industry participants are concentrating on growth strategies, including expanding their portfolios, converting properties, forging partnerships and enhancing loyalty programs. Industry players, such as Hilton Worldwide Holdings Inc. ((HLT - Free Report) ), Hyatt Hotels Corporation ((H - Free Report) ) and Soho House & Co Inc. ((SHCO - Free Report) ) are likely to benefit from the factors mentioned above.
Industry Description
The Zacks Hotels and Motels industry comprises companies that own, lease, manage, develop and franchise hotels. Some vacation ownership and exchange firms are also part of the industry. Several participants own, construct and operate resorts. Some companies develop lodgesand mobile accommodations, including modular, skid-mounted ones and central amenities that provide long-term and temporary workforce accommodations. Some industry players develop, market, sell and manage vacation ownership and associated products. A few hoteliers also offer studios, one-bedroom suites, and accommodations to mid-market business and personal travelers.
4 Trends Shaping the Future of the Hotels & Motels Industry
Economic Uncertainty & Slowing Growth: The broader U.S. economy remains a headwind for hotels, with inflation, high interest rates and softening consumer confidence curbing discretionary spending. Leisure demand has cooled from its post-pandemic highs, while corporate travel budgets remain cautious. Many companies are trimming travel-related expenses, leading to weaker bookings in both urban and convention-heavy markets.
Labor Shortages & Rising Wages: Staffing continues to be one of the most significant challenges for hoteliers. Despite wage hikes and added incentives, hotels struggle to recruit and retain enough workers across housekeeping, food service and front-desk operations. Elevated labor costs directly erode profitability, while understaffed properties often compromise service quality, hurting guest satisfaction and repeat business.
RevPAR & Occupancy Declines: According to CoStar, a leading provider of real estate data and analytics, the U.S. hotel industry posted softer performance metrics in early August 2025, with both weeks showing year-over-year declines in RevPAR and occupancy. For the week ending Aug. 9, occupancy slipped 1% to 68.0%, while ADR declined 0.6% to $159.61, resulting in a 1.6% drop in RevPAR to $108.47. In the week ending Aug. 16, occupancy decreased 0.9% to 66.3%, although ADR managed a modest 0.4% gain to $157.51. However, RevPAR still fell 0.5% to $104.50.
Digitalization to Drive Growth: Hotel owners are focused on maintaining the balance between maximizing hotel profitability and driving guest satisfaction. To this end, hoteliers have leveraged mobile and web check-in and mobile key technologies. These hoteliers also increased the use of digital tools to strengthen infrastructure, grow online package sales, enable self-service bookings, make real-time offerings and enhance the overall customer experience. This, along with the emphasis on pricing optimization and merchandising capabilities, will likely help hoteliers capture additional market share.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Hotels and Motels industry is grouped within the broader sector.
The group's Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. The Zacks Hotels and Motels industry currently carries a Zacks Industry Rank #176, which places it in the bottom 28% of the 245 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry's position in the bottom 50% of the Zacks-ranked industries results from a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, analysts are gradually losing confidence in this group's earnings growth potential.
Before we present a few stocks that you may want to keep an eye on, let us look at the industry's recent stock-market performance and valuation picture.
Industry Underperforms the S&P 500
In the past year, the Zacks Hotels and Motels industry has underperformed the S&P 500 and the sector. Over this period, the industry has appreciated 3.8% compared with the sector's rise of 26.6%. Meanwhile, the Zacks S&P 500 composite has rallied 16.2%.
Hotels & Motels Industry's Valuation
Based on the trailing 12-month EV/EBITDA, which is a commonly used multiple for valuing Hotels and Motels stocks, the industry is currently trading at 15.47X compared with the S&P 500's 17.7X. The sector's trailing 12-month EV/EBITDA ratio stands at 10.55X.
Over the last five years, the industry has traded as high as 89.02X and as low as 13.17X, the median being 17.27X, as the chart below shows.
3 Hotels & Motels Stocks to Watch
Soho House: The company’s growth continues to be fueled by the strength of its membership model and strategic initiatives aimed at enhancing member value. Under CEO Andrew Carnie’s leadership, the company has emphasized experiential openings, such as Soho Farmhouse Ibiza, upgrades to existing Houses and more curated cultural programming, all of which strengthen engagement and retention.
SHCO currently flaunts a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for Soho House’s 2025 bottom line suggests a surge of 81.1% from the year-ago period’s actual. SHCO shares have risen 20.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price & Consensus: SHCO
Hilton: The company is benefiting from strong net unit growth, hotel conversions and recovery across international markets. The company’s focus on expanding its luxury portfolio, along with growth in Hilton Honors membership, remains a key positive. Also, its emphasis on a capital-light model and a disciplined capital return strategy bodes well.
HLT presently has a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for Hilton’s 2025 EPS suggests growth of 12.2% from the year-ago period’s actual. HLT shares have jumped 26.9% in the past year.
Price & Consensus: HLT
Hyatt: The company is benefiting from strong leisure travel demand and RevPAR gains in luxury and all-inclusive segments. Also, its focus on unit expansion, acquisitions and asset-light models bodes well. Additionally, brand launches in select service and the ongoing expansion of the World of Hyatt loyalty program enhance the company’s competitive positioning.
H currently carries a Zacks Rank #3. The company’s 2025 top line is likely to witness year-over-year growth of 6%. H shares have declined 3% in the past year.
Price & Consensus: H