Industry Overview - The U.S. hotel industry is transitioning to a more normalized demand environment by 2026, with stabilized travel activity following years of volatility [2] - The industry is experiencing stable occupancy trends, modest revenue growth driven by rates, and uneven regional performance, while cautious corporate travel patterns impact near-term momentum [2] - The Zacks Hotels and Motels industry has declined by 0.7% over the past year, underperforming the S&P 500's 19.3% increase, indicating a selective and margin-focused operating environment [3] Marriott International - Marriott's positioning for 2026 is supported by its unmatched global scale, premium brand portfolio, and the strength of its loyalty program, Marriott Bonvoy, which drives demand and earnings [6] - The company has a record development pipeline, with strong global signings and conversion activity, enhancing capital efficiency and expanding high-margin fee streams [7] - Marriott's RevPAR growth is expected to stabilize, with sales and EPS estimates for 2026 suggesting increases of 6.2% and 13.5%, respectively, from the previous year [9] Hilton Worldwide - Hilton's strategy for 2026 is characterized by its asset-light model, strong free cash flow generation, and industry-leading net unit growth, despite near-term RevPAR trends being uneven [13] - The company is focused on development-led growth, with a robust pipeline supported by conversions and new brand launches, allowing rapid scaling without significant balance-sheet intensity [14] - Hilton's sales and EPS estimates for 2026 indicate increases of 9% and 14.2%, respectively, from the previous year [16] Hyatt Hotels - Hyatt's approach for 2026 is marked by a concentrated operating profile focused on luxury and lifestyle segments, leading to greater variability in performance [17] - The company faces challenges from uneven demand trends and macro risks, particularly in the U.S. and Greater China, affecting its near-term results [19][20] - Hyatt's sales and EPS estimates for 2026 suggest increases of 2% and 146.9%, respectively, from the previous year [21] Conclusion - The hotel industry is moving towards a normalized phase characterized by stable occupancy and rate-driven revenue growth, emphasizing disciplined execution and earnings durability [22] - Marriott offers a steady profile with strong global scale and brand portfolio, while Hilton is well-positioned for superior upside potential due to its asset-light model and growth strategies [23] - Hyatt provides differentiated exposure to luxury travel but is more sensitive to macro conditions and regional demand variability [23]