The U.S. hotel industry is entering a more normalized demand environment in 2026 as travel activity stabilizes following several volatile years. Stable occupancy trends, modest rate-led revenue growth and uneven regional performance continue to shape operating conditions, while cautious corporate travel patterns weigh on near-term momentum. Elevated labor and operating costs remain a persistent headwind, reinforcing a more measured industry outlook and a shift away from volume-driven growth.

Reflecting this tempered setup, the Zacks Hotels and Motels industry has declined 0.7% over the past year, underperforming the broader S&P 500’s advancement of 19.3%, highlighting a more selective and margin-focused operating environment.

That said, the backdrop is not uniformly challenging. Hotel operators with strong loyalty ecosystems, premium brand exposure, disciplined pricing strategies and scalable, asset-light operating models are demonstrating relative resilience. Conversion-led development, technology-enabled efficiency initiatives and diversified fee-based revenue streams are helping respective companies manage cost pressure. As group and business travel gradually strengthen—particularly in urban and convention-oriented markets—well-positioned brands are better equipped to defend margins and maintain profitability.

Within this landscape, Marriott International, Inc. (MAR Quick QuoteMAR - Free Report) , Hilton Worldwide Holdings Inc. (HLT Quick QuoteHLT - Free Report) and Hyatt Hotels Corporation (H Quick QuoteH - Free Report) stand out as prominent global operators navigating the same macro backdrop through differentiated strategic approaches. Each brings a distinct mix of scale, brand positioning and growth levers, shaping varied risk-reward profiles as investors evaluate which hotel stocks are best positioned to lead into the next phase of the cycle.

Marriott International: Scale, Loyalty and Premium Mix Support Visibility

Marriott’s positioning entering 2026 is anchored by unmatched global scale, a premium-skewed brand portfolio and the strength of Marriott Bonvoy as a durable demand and earnings driver. The company continues to benefit from relative outperformance at the upper end of the chain scale, where higher-income consumers have remained more resilient and continue to prioritize travel. Luxury and premium segments have been leading RevPAR trends, while select-service demand has been comparatively mixed.

Development momentum remains a key support. Marriott’s pipeline stands at a record level, underpinned by strong global signings, robust conversion activity and sustained owner preference for its brands despite elevated construction and financing costs. Conversions, in particular, are enhancing capital efficiency while expanding high-margin fee streams. Ongoing growth across lifestyle and experiential brands is further deepening Marriott’s exposure to demand-rich travel categories.

Marriott Bonvoy continues to reinforce the broader ecosystem. Membership growth, co-branded credit cards and adjacent businesses—including media, retail and alternative accommodations—are expanding engagement and monetization beyond traditional room nights. With RevPAR growth expected to stabilize and room growth remaining solid, Marriott heads into 2026 with high visibility into steady, mid-cycle earnings expansion.

Marriott currently has a Zacks Rank #3 (Hold) and has gained 12.6% in the past year. For 2026, the Zacks Consensus Estimate for MAR’s sales and earnings per share (EPS) suggests an increase of 6.2% and 13.5%, respectively, from the year-ago period’s levels. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MAR, HLT & H One-Year Price Performance

Image Source: Zacks Investment Research

Hilton Worldwide: Asset-Light Growth and Conversion Momentum

Hilton’s 2026 setup is defined by its asset-light model, strong free cash flow generation and industry-leading net unit growth. Although near-term RevPAR trends have been uneven due to calendar shifts, government travel softness and renovation impacts, attributes of fee growth, cost discipline and portfolio mix optimization are likely to aid the company in the upcoming periods.

A central pillar of Hilton’s strategy is development-led growth. Net unit growth remains robust, supported by a conversion-heavy pipeline and expanding luxury, lifestyle and upper midscale offerings. New brand launches and collection formats are unlocking significant white space among independent hotels, particularly in the upper midscale and upscale segments, where Hilton sees a large global conversion opportunity. This approach allows Hilton to scale rapidly without balance-sheet intensity while maintaining attractive owner economics.

Hilton expects group demand to strengthen, with forward bookings improving in 2026. Management also points to limited industry supply growth and a potentially more supportive macro backdrop as tailwinds for future RevPAR. With free cash flow conversion exceeding peers and substantial capital returns ongoing, Hilton appears positioned to deliver a combination of steady earnings growth and shareholder yield into 2026.

Hilton currently has a Zacks Rank #3 and has gained 18.2% in the past year. For 2026, the Zacks Consensus Estimate for HLT’s sales and EPS suggests an increase of 9% and 14.2%, respectively, from the year-ago period’s levels.

Hyatt Hotels: Premium Exposure With Elevated Macro Sensitivity

Hyatt approaches 2026 with a more concentrated operating profile, skewed toward luxury, lifestyle and all-inclusive segments, resulting in greater variability in near-term performance. Management has acknowledged that uneven demand trends and region-specific pressure continue to weigh on results. In the United States, select-service hotels underperformed amid softer leisure transient demand, highlighting ongoing weakness in lower-tier discretionary travel. RevPAR comparisons were further pressured by holiday timing distortions and event-related impacts, which reduced group contribution during the period.

International markets have been comparatively stronger, though not without challenges. In Greater China, Hyatt cited a pronounced slowdown in banqueting and food-and-beverage activity, driven by continued government pressure that has made consumers more cautious around conspicuous spending. This dynamic persists even as room demand in upper-upscale and luxury properties remains relatively stable. 

Hyatt has also flagged exposure to external macro risks that could disrupt travel demand. Management pointed to the U.S. government shutdown and FAA-mandated reductions in flight capacity as potential headwinds, noting that it would be “naive” to assume such constraints will not affect travel volumes. While revenue-management actions may help offset some of the impact, reduced air lift represents a near-term risk, particularly for leisure-oriented destinations. Although Hyatt’s capital-light evolution, expanding pipeline and growing loyalty contribution are likely to support longer-term growth potential, the company remains more sensitive to demand volatility and external shocks than its peers.

Hyatt currently has a Zacks Rank #4 (Sell) and has gained 4.8% in the past year. For 2026, the Zacks Consensus Estimate for H’s sales and EPS suggests an increase of 2% and 146.9%, respectively, from the year-ago period’s levels.

Bottom Line

Overall, the hotel industry is navigating a more normalized phase of the cycle characterized by stable occupancy trends and rate-driven revenue growth, placing a premium on disciplined execution and earnings durability. Marriott offers a steady, lower-volatility profile underpinned by unmatched global scale, a premium-weighted brand portfolio and the enduring strength of its loyalty ecosystem. 

Hyatt provides differentiated exposure to luxury and experiential travel, but its more concentrated operating footprint introduces greater sensitivity to macro conditions and regional demand variability. Hilton, by contrast, stands out for its asset-light business model, industry-leading unit growth and strong free cash flow generation, supported by a conversion-led development pipeline and improving group demand trends. As investors look toward 2026, Hilton appears best positioned to deliver superior upside potential, while Marriott and Hyatt offer a measured, albeit distinct, risk-reward profiles.