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Key Takeaways
- Goldman Sachs downgraded Hyatt, Hilton and Marriott shares on Monday.
- The bank also lowered its outlook on U.S. hotels.
- Goldman Sachs attributed the weaker outlook to a lagging consumer market, increasing economic uncertainty, as well as troubling signals from airlines.
Goldman Sachs cut its outlook for U.S. hotel demand Monday, citing lagging consumer demands, increasing economic uncertainty, as well as troubling signals coming from the airline industry.
The bank now expects the average revenue per available hotel room (RevPAR) to grow by 0.4% in 2025 compared to its previous estimate of 1.4%. Goldman analysts downgraded Marriott International and Hilton Worldwide to “neutral” as a result of their decision.
The updated forecast does not account for a recession, Goldman said, which “would likely drive further downside." The bank has set the odds of a downturn at 45%. It notes that previous economic downturns were accompanied by double-digit drops in RevPAR.
Hyatt shares fell 3% on Monday, while Marriott, Hilton, and other companies saw their shares fall about 1%. This was despite a broader market gain. (Read Investopedia’s live coverage of today’s market action here.)
Airline forecast cuts weigh on sentiment
In March, three of the largest U.S. airlines—Delta Air Lines (DAL), Southwest Airlines (LUV), and American Airlines (AAL)—had dropped projections for the first quarter of the year, citing weakening travel demand amid worries about the economy.
Delta CEO Ed Bastian stated last week that “people are acting as if we are going to go.” [into] The airline retracted its full-year guidance.
The airlines’ demand warning has affected travel stocks across all sectors of the booking industry. This includes hotels and cruise lines. Hilton, Marriott, Hyatt, and other hotel companies have all lost around a fifth in value since the start of March.
