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Goldman Sachs Downgrades U.S. Hotel Stocks Amid Economic Concerns

Analysis of Hotel Market Outlook

Goldman Sachs issued a downgrade for several leading hotel chains, including Hyatt, Hilton, and Marriott, in a strategic shift reflecting a dimming outlook for the U.S. hotel sector. The bank highlighted decreasing consumer demand, escalating economic instability, and concerning developments within the airline industry as principal factors for this pessimistic assessment.

The financial institution now anticipates that the average revenue per available room (RevPAR) for U.S. hotels will see a minimal increase of merely 0.4% in 2025, a significant reduction from their previous forecast of 1.4%. Consequently, analysts at Goldman have revised Hyatt Hotels’ stock rating to “sell,” while adjusting Marriott International and Hilton Worldwide to “neutral.”

This latest forecast does not factor in a potential recession, which Goldman analysts warn could further exacerbate the situation. Currently, they estimate a 45% likelihood of an economic downturn, underlining that previous recessions have historically led to substantial declines in RevPAR, often exceeding double digits.

Following the announcement, Hyatt’s stock fell by 3%, while shares of Marriott and Hilton decreased by approximately 1%, even as the broader market experienced gains.

Impact of Airline Industry on Travel Sentiment

The sentiment in the travel sector has been further complicated by recent forecasts from major U.S. airlines. Industry giants such as Delta Air Lines, Southwest Airlines, and American Airlines have lowered their expectations for the first quarter, citing declining travel demand amid growing economic uncertainties.

Delta’s CEO, Ed Bastian, recently remarked on travelers’ cautious behavior, suggesting that the public is bracing for a potential recession, leading the airline to retract its full-year financial guidance.

The adverse forecasts from these airlines have reverberated throughout the travel industry, negatively impacting stocks across various sectors, including hotels and cruise lines. Since the onset of March, shares of Hilton, Marriott, and Hyatt have diminished by approximately 20%. This market shift illustrates the interconnected nature of travel sectors and the widespread impact of economic sentiment on consumer behavior.

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