Hotel stocks decline again to kick off the fourth quarter

Baird Hotel Stock Index falls 1.8% in October

Traders work on the floor of the New York Stock Exchange on Oct. 20 in New York City. (Getty Images)

https://www.costar.com/article/1414120487/hotel-stocks-decline-again-to-kick-off-the-fourth-quarter?

By Dan Kubacki

Public hotel company stocks fell month over month in October for the third time in the last four months.

The Baird Hotel Stock Index — which comprises 20 of the largest hotel brand companies and real estate investment trusts publicly traded on a U.S. stock exchange by market capitalization — dipped 1.8% in October, its second consecutive month of declines. The index has fallen year over year in six out of 10 months in 2025.

Year to date, the Baird Hotel Stock Index is down 7.1%.

The S&P 500 — an indicator of the health of the broader economy — rose 2.3% in October. Year to date, the S&P 500 is up 16.3%.

“Hotel stocks declined again in October, and both the global hotel brands and hotel REITs underperformed their respective benchmarks,” said Michael Bellisario, senior research analyst and managing director at Baird. “U.S. RevPAR trends remained relatively weak in October, particularly within the lower-end chain scales, and investors continued to reduce their fourth-quarter and near-term growth expectations for the industry.”

The RMZ, or MSCI U.S. REIT Index — which is a gauge of the overall real estate investment market — fell 1.7% during the month.

The hotel brand sub-index dipped 1.2% in October, while the hotel REIT sub-index slid 5.6%.

Month over month, the stock values of IHG Hotels & Resorts and Marriott International were mostly flat but led the public hotel companies. Meanwhile, Ashford Hospitality Trust's stock was down 19.2% month over month in October.

Year over year, Hilton and IHG both achieved stock gains 9% or higher in October. On the other end, the stock values of Ashford Trust and Choice Hotels International posted the sharpest declines compared to October 2024.

For more information about the Hotel Stock Index, email hotelstockindex@rwbaird.com. The Baird Hotel Stock Index and sub-indices are available exclusively on CoStar News Hotels. The indices were created by Robert W. Baird & Co. (Baird). The market-cap-weighted, price-only indices comprise 20 of the largest market-capitalization hotel companies publicly traded on a U.S. exchange and attempt to characterize the performance of hotel stocks. The Index and sub-indices are maintained by Baird and hosted on Hotel News Now, are not actively managed, and no direct investment can be made in them. As of 30 June 2021, the companies that comprised the Baird Hotel Stock Index included: Apple Hospitality REIT, Ashford Hospitality Trust, Chatham Lodging Trust, Choice Hotels International, DiamondRock Hospitality Company, Hersha Hospitality Trust, Hilton Inc., Host Hotels & Resorts, Hyatt Hotels, InterContinental Hotels Group, Marriott International, Park Hotels & Resorts, Inc., Pebblebrook Hotel Trust, RLJ Lodging Trust, Ryman Hospitality Properties, Service Properties Trust, Summit Hotel Properties, Sunstone Hotel Investors, Wyndham Hotels & Resorts, and Xenia Hotels & Resorts.

International demand the main driver of Marriott's hotel performance

Higher-end chain scales expected to outpace lower-end hotels

Marriott International added roughly 17,900 net hotel rooms during the third quarter, with nearly 13,900 net rooms in international markets. The all-inclusive 340-key W Punta Cana opened in August. (Marriott International)

https://www.costar.com/article/365504307/international-demand-the-main-driver-of-marriotts-hotel-performance?

By Bryan Wroten

International travel demand is expected to continue to drive hotel performance through 2026 for Marriott International while the U.S. and Canada continue to struggle.

During the company’s third-quarter earnings call, Marriott Chief Financial Officer and Executive Vice President of Development Leeny Oberg said that with the ongoing economic uncertainty, Marriott expects global revenue per available room to increase by 1% to 2% in the fourth quarter.

That acceleration from the third to the fourth quarter is partially due to calendar shifts and one-time events, she said.

“RevPAR growth is anticipated to still be meaningfully stronger internationally than in the U.S. and Canada, and higher-end chain scales are expected to continue to outperform lower-end chain scales,” she said.

During Marriott's second-quarter earnings call, executives said they were — like many other companies at the time — lowering their full-year guidance for 2025 over worries of slowing economic activity.

As Marriott continues to work on next year’s budget, the preliminary view is that 2026 year-over-year global RevPAR growth will be similar to the 1.5% to 2.5% growth expected this year, Oberg said.

“Growth is expected to again be higher internationally than in the U.S. and Canada, and next summer's World Cup could contribute around 30 to 35 basis points to full-year global RevPAR growth,” she said.

Third-quarter performance

Marriott's RevPAR growth for the third quarter was modest, as expected, reflecting the ongoing global macroeconomic uncertainty, President and CEO Tony Capuano said. Marriott’s hotels continued to gain RevPAR index, however.

Third-quarter global RevPAR grew by half a percent, with international markets growing RevPAR by 2.6% while RevPAR was down 0.4% in the U.S. and Canada, he said. RevPAR growth was strongest in the Asia-Pacific region excluding Greater China, growing nearly 5% due to robust average-daily-rate growth and higher demand from international travelers, particularly from Greater China and Europe. RevPAR in India grew by 2.5% due to an increase in both ADR and occupancy led by strong regional demand.

When excluding the impact of the Summer Olympics in France and the Euro 2024 in Germany last year, RevPAR in Europe, the Middle East and Africa would have been up by 5% year over year, he said. RevPAR in the Caribbean and Latin America rose nearly 3% with gains in both ADR and occupancy, helped by citywide events in Puerto Rico and Rio de Janeiro.

Macroeconomic conditions continue to challenge the operating environment in Greater China, but Marriott’s market share across the region continued to grow, he said.

“With year-over-year comps easing and demand stabilizing, RevPAR was flat and would have been slightly positive excluding the impact of multiple typhoons,” he said. “Leisure demand was solid, offsetting a decline in business-transient demand.”

RevPAR declines in the U.S. and Canada were fueled by underwhelming performance at Marriott's select-service hotel brands, Capuano said. The gains in luxury and calendar shifts affecting group demand helped offset those declines.

Third-quarter group RevPAR decreased by 3% while leisure was up slightly and business transient was down slightly compared to last year, he said. The 14% decline of government-related RevPAR further affected business transient.

By customer tier, global RevPAR growth was strongest at the higher end of Marriott's offerings, Capuano said, adding that “high-end consumers have demonstrated resilience to macroeconomic uncertainties and continue to prioritize travel.”

Luxury revenue grew by 4% as performance weakened down the chain scales, he said. Ten percent of Marriott’s hotel rooms portfolio is in the luxury segment, and another 42% of the rooms are in the full-service premium segment.

By customer segment on a global basis, leisure transient continued to lead RevPAR performance, rising 1%, he said. Business transient RevPAR was flat, and group RevPAR declined 2%, reflecting the timing of events.

Pipeline update

Marriott added about 17,900 net hotel rooms to its portfolio during the quarter, resulting in net room growth of 4.7% year over year, according to the company's earnings report. Of the rooms added, nearly 13,900 were in international markets. By the end of the quarter, Marriott’s global hotel system had more than 9,700 properties with more than 1.75 million rooms.

By the end of the quarter, Marriott had 3,923 hotels with more than 596,000 rooms in its worldwide development pipeline. Of those, 229 properties with nearly 36,000 rooms were approved for development but not yet subject to signed contracts. The pipeline included 1,536 properties with more than 250,000 rooms under construction, which includes those undergoing conversions. More than half of the hotels in the quarter-end pipeline are in international markets.

The pipeline figures do not include any rooms from Marriott’s acquisition of the CitizenM brand, which should integrate into the company's system and platforms next quarter.

Conversions remain a key driver of Marriott's portfolio expansion, accounting for about 30% of both signings and openings during the first nine months of the year, Capuano said.

During the quarter, Marriott launched its Outdoor Collection by Marriott Bonvoy, which includes the Postcard Cabins and Trailborn Hotels brands.

By the numbers

For the third quarter, Marriott reported total revenue of nearly $6.5 billion, up 4% year over year, according to the earnings release. It reported net income of $728 million, an increase of 25% year over year.

Adjusted earnings before interest, taxes, amortization and depreciation totaled nearly $1.4 billion, a 10% year-over-year increase.

At the end of the third quarter, Marriott reported it had a total debt of $16 billion and cash and equivalents of $700 million, according to the earnings report. By the end of 2024, Marriott had total debt of $14.4 billion and $400 million in cash and cash equivalents.

It repurchased 3 million shares of common stock in the third quarter for $800 million. Year to date through Oct. 30, it has repurchased 9.7 million shares for $2.6 billion.

As of press time, Marriott’s stock was trading at $274.15 per share, down 0.1% year to date. The NASDAQ Composite was up 22.4% for the same period.

Further cuts in 2025, 2026 US forecastshttps://www.hotelinvestmenttoday.com/Forecasts/Further-cuts-in-2025-2026-US-forecasts?

Jeffrey Weinstein

Job market softening, policy uncertainty and tariff costs remain near-term drags, while 2026 is expected “firm up moderately.”

NATIONAL REPORT – CoStar and Tourism Economics have further downgraded performance projections in the final U.S. hotel forecast revision of 2025, as well as for 2026.

For 2025, occupancy was lowered 0.2 percentage points to 62.3%, while average daily rate (ADR) was maintained at +0.8% for the year. Revenue per available room (RevPAR) was downgraded 0.3 ppts to -0.4%. The last total-year RevPAR declines in the U.S. occurred in 2020 and 2009.

Similar adjustments were made for 2026: occupancy (-0.3 ppts), ADR (-0.1 ppts) and RevPAR (-0.3 ppts).

“We expect little change in the macroeconomic environment as unemployment and prices continue to rise,” said STR President Amanda Hite. “As a result, our hotel performance outlook for the remainder of this year and next were lowered once again. ADR is growing well below the rate of inflation, which in turn will put more pressure on margins.”

“Job market softening, policy uncertainty, and tariff costs remain near-term drags for consumers. However, heading into 2026, we expect the U.S. travel economy to firm up moderately,” said Aran Ryan, director of industry studies with Tourism Economics. “Household income growth will continue, accompanied by tax cut benefits, resumed hiring, and less policy instability. Expanding global long-haul travel and World Cup interest will bring improved international visitation.”

“GOPPAR projections have been lowered from our previous forecast, with the decrease in 2025 being mainly due to higher expenses, especially in the F&B department, as well as increased costs in other operated departments, marketing, and utilities,” Hite said. “Labor costs will be slightly higher in 2025, likely due to the increase in the aforementioned F&B department, which is traditionally more labor-intensive.”

Jamaica faces uneven recovery after hurricane

https://www.hotelinvestmenttoday.com/Regions/Caribbean/Jamaica-faces-uneven-recovery-after-hurricane?By Christina Jelski

Some resorts already are welcoming back guests, while others in harder-hit regions face lengthy reopening timelines.

INTERNATIONAL REPORT – Jamaica’s hospitality sector is facing an uneven recovery following Hurricane Melissa with some resorts already welcoming back guests while others in harder-hit regions face lengthy reopening timelines.

Properties in the Montego Bay area were hit much harder by the hurricane’s October 28 landfall than those in Ocho Rios and Negril.

“Jamaica is a large and diverse island, and each region has experienced the storm differently,” said Adam Stewart, executive chairman of Sandals Resorts International, which has eight resorts across the island.

Five of the group’s resorts in Negril and Ocho Rios will reopen December 6: the Sandals Dunn's River, Sandals Ocho Rios, Sandals Royal Plantation, Sandals Negril and Beaches Negril. Sandals said that some of those resorts could theoretically open soon -- Steward said the Ocho Rios properties were “largely unaffected by the most severe impacts” -- but that the company set the December date “to offer a period of rest and recovery for our local team members in Jamaica.”

That wasn’t the case for the company's properties in Montego Bay and White House. The Sandals Montego Bay, Sandals Royal Caribbean and Sandals South Coast resorts won’t reopen until May 30.

Likewise, Hyatt’s Inclusive Collection has suspended operations and new bookings at its eight Montego Bay-area properties through January, including the Breathless Montego Bay, Dreams Rose Hall, Hyatt Zilara Rose Hall, Hyatt Ziva Rose Hall, Secrets St. James Montego Bay, Secrets Wild Orchid Montego Bay, Jewel Grande Montego Bay and Zoetry Montego Bay Jamaica.

As of October 31, Hyatt said it was conducting detailed assessments to determine the extent of physical damage.

Salamander Collection’s Half Moon resort, also in Montego Bay, aims to reopen December 15, citing impacts to local infrastructure as a factor in its timeline. The property added that it plans a phased reopening, initially welcoming guests to its Eclipse at Half Moon and Villas at Half Moon accommodations.

Round Hill Hotel & Villas in Montego Bay set a December 8 reopening. The luxury resort added that it hopes to open sooner. Round Hill said that although it remains “fully intact,” impact to local infrastructure has affected its ability to reopen.

The Palace Company’s Moon Palace Jamaica in Ocho Rios was among the resorts that reported no significant impact; guests were able to return to their rooms and access the property’s facilities, pool and beach the day after the hurricane. The resort is currently welcoming guests, although a Moon Palace Jamaica spokesperson said there are limited commercial flights available. Roads in the Ocho Rios area are accessible.

“We are now assisting other properties that are sending their reservations to us, because unfortunately they were affected, most of them in the Montego Bay area,” said Daniel Adolfo Conte, vice president of commercial relations at the Palace Company.

Couples Resorts, which operates four properties in Ocho Rios and Negril, also reported minimal impact but delayed reopening until December 1 while the island undergoes a full assessment.

Luxury boutique hotel GoldenEye, located on the island’s eastern end along Oracabessa Bay, sustained minimal damage and announced a November 6 reopening.

Task force to aid comeback

In support of the islandwide recovery effort, Jamaica’s Ministry of Tourism has activated a Hurricane Melissa Recovery Task Force, with minister of tourism Edmund Bartlett setting a December 15 target date for Jamaica’s tourism industry to be fully operational.

Among those appointed to serve on the task force is Sandals’ Stewart, who emphasized that returning visitors will play a key role in Jamaica's comeback.

“Tourism is a vital part of Jamaica’s national recovery, and guests can feel confident that the best way to support the region is by visiting and returning to the island they love,” Stewart said.

The late-October timing of Hurricane Melissa adds to the island’s challenges, as many closures are expected to stretch over the crucial holiday season.

“That’s peak season, and they’re losing out on it,” said Michael Cummings, CBRE's managing director for valuation and advisory services. “It's going to be a while before Jamaica recovers.”

Cummings added that immediate humanitarian needs will continue to take precedence over resort operations.

“How can you expect somebody to come back and work your resort when they don’t have a home?” he said.

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