Publicly traded hotel companies will likely be more conservative in their outlooks for 2026 during their fourth quarter and full-year 2025 earnings calls, analysts say.
This isn't necessarily because the U.S. hotel industry is expecting a further downturn from last year, but there is just less visibility in the select-service business and weaker short-term trends in revenue per available room, said Michael Bellisario, senior research analyst at Baird Capital.
"It's just always tough when you're having to cut guidance every 90 days," he said. "You'll see wider ranges and perhaps a little extra conservatism, because you can. The stocks are down. Sentiment is negative. The market is sort of giving you a pass to do that."
The RevPAR trends through the first handful of weeks in 2026 "are still not fantastic," Bellisario said.
"It's always easier to guide more confidently when the RevPAR trends are more favorable," he said.
Bifurcation will continue to be a trend in the hotel industry this year, with companies positioned more toward the higher end feeling better than those highly saturated in the economy and midscale segments.
"The theme of high end, low end will be pretty topical and still present during conference calls and management team commentary," Bellisario said.
C. Patrick Scholes, managing director of lodging and leisure equity research at Truist Securities, said he expects the general tone from companies to strike a "one day at a time" approach.
There are a lot of positives to draw on this year, including fortuitous calendar shifts for holidays, the FIFA World Cup in North America and the 250th anniversary of the U.S., Scholes said. But on the heels of a year that featured downward changes in outlooks and volatility in the market after initial optimism, companies are going to play it safe with their projections this time around.
"You don't need to be a hero and make [the outlook] 200 basis points above on the RevPAR. Take it one day at a time. Don't have to be a hero to start, [you're] not going to disappoint," he said. "If these bookings and World Cup pricing power come to fruition, there will definitely be upside this year."
Current geopolitical tensions with the U.S. at the center is "a real risk," Scholes said.
"Every day we wake up and we don't have Liberation Day 2.0 greeting us when we're watching our favorite news channel is a good thing," he said.
World Cup effect
The World Cup will take place in 11 U.S. markets this summer and will undoubtedly have an effect on hotel performance. How much of an effect is what hotel companies are still trying to figure out.
Bellisario said he's assuming most hotel company executives will include little benefit from the World Cup in their outlooks because there is still not a lot of business on the books.
"It's still early in that a lot of the FIFA blocks have certain outs in their contracts through the end of February," he said. "There'll be more clarity come March 1 because those FIFA blocks will become firmer, ticket allocations occur and we'll just be a couple more weeks closer to people booking trips and hotel stays for mid-June soccer matches.
"If anything, the headlines and ticket prices are — not that it's incrementally worse — but there's probably a slightly lower ceiling on how everyone's thinking about the World Cup today ... which probably just makes management teams on the margin maybe a little bit more conservative on how they include that in their guide because they don't know."
The tournament will be most beneficial to public REITs, especially DiamondRock Hospitality and Host Hotels & Resorts, Scholes said, given where their portfolios are located.
Among the hotel brands, people are underestimating the positive effect compression will have for companies with portfolios geared toward midscale and economy properties such as Choice Hotels International and Wyndham Hotels & Resorts, Scholes said.
"They're not going to benefit as much as the upper-end hotels that are close, but they will certainly benefit," he said. "I think people are underestimating just how rising tides will lift all boats here, assuming it goes as intended."
Companies to watch
There won't be too many surprises from Marriott International and Hilton during their earnings calls, but Bellisario said there will be eyes on Hyatt Hotels Corp.
"[There are] lots of moving pieces in the model, Caribbean impacts, Playa portfolio transaction — there's more moving pieces and some uncertainty that I think needs to be crystallized with their guidance and their outlook," he said.
The continued bifurcation of the industry will make Choice and Wyndham's calls interesting as well, Bellisario said.
"Similar to the select-service guys, it's just been very difficult on a RevPAR front, the stocks have lagged, the multiples are depressed [and] they don't have a lot of visibility in their business," he said.
Bifurcation will also be prevalent on the hotel REIT side. Capital allocation will be a focus for Host, Sunstone Hotel Investors and Park Hotels & Resorts, Bellisario said.
"The bar for acquisitions is high; the bar for buybacks is higher," he said. "You'll still see some asset sales, but they're all going to be selective, and it's sort of like a waiting game almost for the RevPAR to get better."