Zacks Industry Outlook Highlights Marriott International, Hilton Worldwide and Soho House

For Immediate ReleaseChicago, IL – May 28, 2025 – Today, Zacks Equity Research discusses Marriott International, Inc. MAR, Hilton Worldwide Holdings Inc. HLT and Soho House & Co Inc. SHCO.Industry: Hotels & MotelsLink: https://www.zacks.com/commentary/2477556/3-stocks-worth-watching-in-a-promising-hotels-motels-industryThe Zacks Hotels and Motels industry is benefiting from an increase in occupancy, average daily rate (ADR) and revenue per available room (RevPAR). The industry’s demand outpaced supply in the first quarter of 2025. Industry participants are concentrating on growth strategies, including expanding their portfolios, converting properties, forging partnerships and enhancing loyalty programs. Industry players, such as Marriott International, Inc., Hilton Worldwide Holdings Inc. and Soho House & Co Inc., are likely to benefit from the factors mentioned above.Industry DescriptionThe 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, villages 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.3 Trends Shaping the Future of the Hotels & Motels IndustryRevPAR & ADR Growth in Q1: Per a CBRE report, in the first quarter of 2025, the hotel industry experienced a 0.4% year-over-year increase in occupancy as demand outpaced supply. Increased occupancy, combined with a 1.9% uptick in ADR, contributed to a 2.2% improvement in RevPAR.However, CBRE has revised its 2025 outlook for the U.S. hotel industry, lowering expectations for occupancy, ADR and RevPAR due to a softer economic forecast and higher projected inflation. The firm now anticipates a 1.3% year-over-year increase in RevPAR, down from its earlier 2% projection, with ADR and occupancy growth revised downward. Despite the more cautious forecast, CBRE believes that the hotel sector will remain resilient, supported by stronger group and business travel, a weaker U.S. dollar, and more affordable airfares, all factors that can drive both domestic tourism and international arrivals.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 and the emphasis on pricing optimization and merchandising capabilities will likely help hoteliers capture additional market share.High Costs Remain Worrisome: Industry participants are concerned about higher costs. Rising salaries, wages and benefits have been adding to labor costs. The hospitality sector continues to struggle with labor shortages, driving up wages and reducing service quality. Hotels are finding it difficult to hire and retain staff, leading to reduced capacity and operational challenges. Heightened geopolitical risks and persistent macroeconomic uncertainty are of concern to the industry. Increases in food and beverage, and non-operating costs, as well as increased renovation costs, are hurting the industry.Zacks Industry Rank Indicates Bright ProspectsThe 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 #88, which places it in the top 36% 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 Outperforms the S&P 500In the past year, the Zacks Hotels and Motels industry has outpaced the S&P 500 but has underperformed the sector. Over this period, the industry has appreciated 11.7% compared with the sector's rise of 18%. Meanwhile, the Zacks S&P 500 composite has rallied 9.3%.Hotels & Motels Industry's ValuationOn the basis of the trailing 12-month EV/EBITDA, which is a commonly used multiple for valuing Hotels and Motels stocks, the industry is currently trading at 16.68X compared with the S&P 500's 16.39X. 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 90.86X and as low as 13.01X, the median being 17.40X.3 Hotels & Motels Stocks to WatchSoho House: The company reported strong first-quarter results, driven by strategic initiatives that are resonating with its global membership base. The company posted an 8% year-over-year increase in total revenues and noted meaningful growth in adjusted EBITDA, reflecting improved profitability. Key growth drivers include ongoing enhancements to the member experience across its global portfolio of Houses, and property openings such as the upcoming Soho Farmhouse Ibiza.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.Marriott: The company is benefiting from robust leisure demand and solid global booking trends. Also, substantial RevPAR growth in the international markets continues to drive improvements. The emphasis on expansion initiatives, digital innovation and the loyalty program bodes well. Marriott continues to enhance its Bonvoy loyalty program, which now has more than 237 million members.MAR currently carries a Zacks Rank #3 (Hold). The company’s 2025 top and bottom lines are likely to witness year-over-year growth of 4.5% and 8.3%, respectively. MAR shares have gained 10.1% in the past year.Hilton: Solid improvement in RevPAR on the back of increased occupancy rates and ADR continues to drive growth. Strong demand for leisure travel, along with growth in business transient and group travel, supported the performance. Also, Hilton’s focus on unit expansion, hotel conversions and loyalty programs bodes well.HLT currently has a Zacks Rank #3. The Zacks Consensus Estimate for Hilton’s 2025 EPS suggests growth of 10.5% from the year-ago period’s actual. HLT shares have jumped 22.4% in the past year.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marriott International, Inc. (MAR): Free Stock Analysis Report Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis Report Soho House & Co Inc. (SHCO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks