The Zacks Hotels and Motels industry shows promising growth driven by increased travel demand and upcoming major events, such as the FIFA World Cup and America250 in 2026, projected to significantly boost hotel bookings. The industry, featuring key players like H World Group Limited (HTHT), Hilton Grand Vacations Inc. (HGV), and Civeo Corporation (CVEO), is expected to benefit from enhanced loyalty programs, superior technology, and better guest services, despite facing challenges from elevated operating costs.
According to CoStar and Tourism Economics, U.S. hotel performance is anticipated to gradually improve starting in 2026, with average daily rates forecasted to rise by about 1% while room occupancy may dip to 62.1%. Notably, revenue per available room (RevPAR) is projected to increase by 0.6% in that year, following a challenging 2025. The industry, currently ranked #97 in the Zacks Industry Rank, outperformed the broader sector with an 11.4% gain over the past year, although it still lags the S&P 500’s overall 33.2% increase.
Operating costs remain a critical concern, primarily due to labor challenges and rising expenses for property upkeep and energy. The current trailing 12-month EV/EBITDA for the Hotels and Motels industry stands at 15.61X, below the S&P 500’s 17.61X, indicating ongoing pressure on profit margins, particularly for smaller and mid-scale properties.
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