Wall Street Analysts Project Improved Conditions for Hotel Companies in 2026

Wall Street analysts expect 2026 to be a comparatively better year for publicly traded hotel companies following a difficult 2025, citing factors such as major events and consumer spending.

Analysts from Baird Capital and Truist have indicated that their outlook for publicly traded hotel companies in 2026 is more positive compared to 2025. The assessment is based on overcoming challenging year-over-year comparisons and on the expectation of stable conditions without further major disruptions.

Michael Bellisario, senior research analyst at Baird Capital, stated that the setup for hotel companies is improved, particularly in the first half of the year. C. Patrick Scholes, managing director of lodging and leisure equity research at Truist, noted that the timing of holidays in the year is a positive factor for the industry.

Both analysts highlighted that their outlook assumes no additional government shutdowns or major disruptions in 2026. Scholes identified this as a significant risk factor but said that current bookings are strong.

Wall Street assumptions for 2026 include an increase in travel demand driven by the largest FIFA World Cup ever and a stronger outlook for consumer confidence and spending. Additional factors mentioned include lower credit card fees, possible purchases of mortgage-backed securities, and larger tax refunds, all of which are expected to contribute to increased consumer spending. The America 250 celebrations are also expected to boost travel, particularly in urban markets.

In terms of market performance, hotel C-corporations, which are the brands, have shown better growth in recent years. There is some expectation that hotel real estate investment trusts (REITs) could see improvement in 2026, depending on the broader health of capital markets. However, Bellisario noted that expense growth is still expected to exceed revenue growth, with margins remaining flat or down. He also stated that mergers and acquisitions could impact the sector.

Scholes commented that hotel REITs continue to face challenges in market perception, particularly among traditional real estate investors, due to years of underperformance.

For hotel brands, Scholes suggested that 2026 could see a narrowing of the performance gap between larger and smaller companies. Companies such as Choice Hotels International and Wyndham Hotels & Resorts, which have a significant presence in the economy segment, were cited as potentially benefiting from stronger consumer demand and low valuation multiples. Scholes recently upgraded Choice Hotels International to a buy rating, projecting low-single-digit growth for the company in 2026.

The outlook for 2027 remains uncertain, with no major events like the World Cup or America 250 celebrations expected. Scholes indicated that potential recovery in government business and international inbound travel could be factors in the future, but there is no clear indication of these trends yet.

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