The Zacks Hotels and Motels industry is being supported by steady travel demand, higher guest spending and the recovery of business and group travel. Major 2026 events like the FIFA World Cup and America250 are also expected to boost hotel bookings, while loyalty programs, better technology and improved guest services are helping hotels attract and retain customers. Industry players, such as H World Group Limited (HTHT Quick QuoteHTHT - Free Report) , Hilton Grand Vacations Inc. (HGV Quick QuoteHGV - Free Report) and Civeo Corporation (CVEO Quick QuoteCVEO - 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 lodges and 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

Strong Travel and Event-Driven Demand: The U.S. hotel industry is seeing healthy growth due to rising travel activity across leisure, corporate and group segments. Consumers are continuing to prioritize travel and experiences, leading to stronger hotel occupancy rates in both urban and resort locations. Business-related travel has also improved as companies resume meetings, conferences and trade events, which supports demand for premium and convention-focused hotels. Additionally, large international events scheduled for 2026, including the FIFA World Cup and America250 celebrations, are expected to attract millions of visitors to the country. This increase in tourist inflow is likely to boost room bookings, daily room rates and overall industry revenues.

Gradual Improvement Expected From 2026 Onward: CoStar and Tourism Economics expect U.S. hotel performance to stabilize and slowly improve starting in 2026. Average daily rates are forecasted to rise about 1% from the prior year, while occupancy is projected to slip slightly to 62.1%. Even with marginally lower occupancy, revenue per available room is still expected to post a modest 0.6% increase in 2026.

This outlook follows a challenging 2025, when both occupancy and RevPAR declined year over year for the first time since 2020. Looking ahead, the firms anticipate stronger and more broad-based growth in 2027, driven by a steadier travel backdrop and healthier consumer spending patterns.

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, is likely to help hoteliers capture additional market share.

Margin Pressure From Elevated Cost Structures: Operating costs continue to weigh heavily on hotel and motel profitability. Labor remains the largest challenge, with staffing gaps forcing operators to pay higher wages, rely on overtime or use third-party staffing services. These measures raise fixed costs and reduce operating leverage.

Beyond labor, hotels are facing higher expenses for property upkeep, insurance premiums and energy costs. With demand normalizing, pricing power has weakened, restricting the industry’s ability to offset rising costs through higher room rates. As a result, margins are under pressure, especially for smaller and mid-scale properties.

Zacks Industry Rank Indicates Bright 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 bright near-term prospects. The Zacks Hotels and Motels industry currently carries a Zacks Industry Rank #97, which places it in the top 40% 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 top 50% of the Zacks-ranked industries results from a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, analysts are gradually gaining 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. However, over this period, the industry has gained 11.4% against the sector's decrease of 5.2%. Meanwhile, the Zacks S&P 500 composite has rallied 33.2%.

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 15.61X compared with the S&P 500's 17.61X. The sector's trailing 12-month EV/EBITDA ratio stands at 10.55X.

Over the past five years, the industry has traded as high as 88.62X and as low as 13.38X, the median being 16.26X, as the chart shows.

 

3 Hotels & Motels Stocks to Watch

H World Group: The company is benefiting from rapid hotel network expansion, supported by strong growth in its manachised and franchised business model. The company continues to gain from increasing hotel turnover, solid demand across the core China market and rising contributions from its diversified brand portfolio spanning economy to upscale segments.

HTHT currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for H World Group’s 2026 bottom line indicates a surge of 22.5% from the year-ago period’s actual. HTHT’s shares have risen 37.4% in the past year.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Price & Consensus: HTHT

Hilton Grand Vacations: The company is benefiting from strong tour growth, rising engagement from new buyers and disciplined cost management initiatives. Hilton Grand Vacations is also gaining from higher fee-based revenues, improved financing income and continued momentum in its real estate sales business.

HGV presently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for Hilton Grand Vacations’ 2026 EPS implies growth of 81.7% from the year-ago period’s actual. HGV’s shares have gained 22.1% in the past year.

Price & Consensus: HGV

Civeo: The company is benefiting from stable demand across its Australian and Canadian operations, supported by healthy occupancy levels and ongoing activity in the energy and mining sectors. Civeo is also gaining from cost-reduction initiatives, contributions from acquired Australian villages and disciplined capital allocation efforts, including share repurchases.

CVEO currently carries a Zacks Rank #2 (Buy). The company’s 2026 bottom line is likely to witness a year-over-year improvement of 56%. CVEO’s shares have gained 63.6% in the past year.

Price & Consensus: CVEO