In this article, we will discuss: 10 Best Hospitality Stocks to Buy According to Hedge Funds.
The hospitality industry is growing quickly and covers businesses related to lodging, dining, tourism, and other services. Approximately 17 million individuals, or more than 10% of the US total, are employed in the leisure and hospitality industry, according to the US Bureau of Labor Statistics. The industry remains a major attraction for recent immigrant labor and an engine of upward mobility, and hotels continue to be sites where hourly staff can advance to the executive suite.
However, the COVID-19 pandemic was a challenging time for the hospitality industry. While many hospitality businesses saw profits drop, the most successful were able to face the challenges and recover once restrictions were eased.
In 2024, the global hospitality market reached $4.9 trillion, showing consistent expansion in the hospitality industry. It contributed to 10% of the world’s GDP as per The World Travel and Tourism and had an economic impact of a record $11.1 trillion. Between January and September 2024, there were 1.1 billion tourists worldwide, an 11% rise over 2023. Looking ahead, the travel and tourism industry is forecast to increase at a 5.8% annual rate between 2022 and 2032, surpassing global economic growth of 2.7% per year.
Looking forward, as per EHL’s hospitality industry insights, 2025 will see a shift in hospitality trends driven by sustainability, innovation, and personalization. From cutting-edge AI technology that improves visitor experiences to contemporary work styles that empower staff, the industry is changing to meet changing expectations. Secondly, workplaces are being shaped by flexibility, inclusivity, and well-being, which is drawing in a new generation of talent ready to work together and have an effect. Meanwhile, innovations like hyper-personalized services and predictive maintenance are redefining excellence. Nowadays, sustainability and customization are key components of hospitality, as visitors look for experiences that are meaningful and customized from establishments that value well-being and ethical behavior. The industry is further elevated by culinary trends, experiential dining, and data-driven analytics, which open doors for innovative, forward-thinking experts.
Dr Jean-Philippe Weisskopf, Assistant Professor of Finance at EHL, stated:
“Tools capable of crunching large swaths of user data are offering hospitality businesses of all sizes the key to unlock smarter financial decisions. With machine learning and real-time analytics, leaders can now predict trends and make moves faster, turning data-driven strategies into a competitive edge.”
On the other hand, according to PwC’s report, which focuses on the key areas of innovation, evolution, and concern that hotel industry leaders and investors are focusing on through 2025 and beyond, the hospitality industry is balancing stability in the short term with long-term expansion. According to the projections, hotel occupancy in the United States is expected to increase to 63.6% in 2024, with RevPAR rising 2.2% to nominally reach 116% of pre-pandemic levels. However, inflation is putting pressure on profits, and room rate hikes have slowed. Group and business travel are getting better, but they are unable to keep up with the drop in demand for leisure travel. Secondly, extended-stay properties, which are worth $300 billion worldwide, are a bright light, but investment activity is still muted because of high capital costs.
Over the next fifty years, growth is anticipated to be driven by mid-market hotels, while luxury developments continue to draw cash. However, there are still labor issues because wages are rising faster than revenue. The sector prioritizes staff retention because it employs 17 million people in the United States, as mentioned above. Key tactics for future resilience include brand transformations, technology investments, and alternate real estate purchases. Hospitality executives are hopeful about continued long-term growth despite economic concerns.
With that said, here are the 10 Best Stocks to Buy According to Hedge Funds.
A professional hotel staff member attending to a charmingly decorated suite.
Methodology
We sifted through holdings of hospitality ETFs and online rankings to form an initial list of 30 Hospitality stocks. These companies specialize in lodging, dining, tourism, and other related services. From the resultant dataset, we chose the top 10 stocks most favoured by hedge funds, using Insider Monkey’s database of 1009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Park Hotels & Resorts Inc. (NYSE:PK)
Number of Hedge Fund Investors: 26
One of the Best Hospitality Stocks, Park Hotels & Resorts Inc. (NYSE:PK) is also the second-biggest lodging REIT in the United States, concentrating on the high-end hotel market. The firm’s portfolio includes 43 upscale hotels and resorts with over 26,000 rooms in desirable US locations under premium brands. Approximately 86% of the hotel’s rooms are luxurious and upmarket. Consolidated hotels and unconsolidated hotels are the two categories into which the business operates.
In 2024, Park Hotels & Resorts Inc. (NYSE:PK) carried out effective asset dispositions, improving RevPAR by $3 and the EBITDA margin by more than 30 basis points through the sale of three hotels for $200 million. To improve portfolio quality and lower debt, the company plans to sell $300-400 million worth of non-core assets by 2025. Strong performance was fueled by successful redevelopments, such as Bonnet Creek Resort in Orlando and Casa Marina Resort in Key West. Bonnet Creek’s RevPAR grew 17% and its EBITDA surpassed $82 million, a 36% rise, while Casa Marina’s RevPAR climbed by over 29% since 2019 and saw a 31% increase in EBITDA. Bonnet Creek’s group revenue is expected to climb by 15% by 2025 due to projects like Universal’s $6 billion theme park.
Park Hotels & Resorts Inc. (NYSE:PK)’s RevPAR rose by 30% YoY in Orlando and 77% at Casa Marina in Q4 of 2024, while Hilton Chicago’s RevPAR improved by about 15% and its EBITDA margin raised by 53 basis points. Furthermore, a $100 million investment in South Beach’s Royal Palm Resort seeks to strengthen its market placement to possibly double its EBITDA post-renovation.
9. H World Group Limited (NASDAQ:HTHT)
Number of Hedge Fund Investors: 29
H World Group Limited (NASDAQ:HTHT) is among the Best Hospitality Stocks. It is a Chinese hotel chain with multiple brands that operate internationally. It uses the franchised, managed, and leased business models. Legacy Huazhu and Legacy DH are the company’s two operating segments. A number of hotels, including the Joya, Ni Hao, JI, and Orange hotels, are owned by the company.
In Q4 2024, H World Group Limited (NASDAQ:HTHT)’s sales surpassed forecasts by growing 7.8% YoY to $825 million, and for the entire year, it jumped 9.2% YoY to $3.3 billion. Hotel turnover surged 16.5% year over year, with Legacy-Huazhu and Legacy-DH segments seeing 17.5% and 6.5% growth, respectively, in Q4.
Despite impressive results, foreign exchange losses and higher tax rates caused net income to drop. In 2024, adjusted EBITDA increased 7.9% year over year to 6.8 billion (US$935 million), demonstrating operational strength even with DH’s restructuring costs. As of December 31, 2024, the company had 11,147 hotels with 1.08 million rooms, positioning it for future expansion.
H World Group Limited (NASDAQ:HTHT) announced $267 million in share repurchases and $300 million worth of cash dividends for H2 2024, for a total of $500 million for the year. This brings the total payouts to shareholders to $767 million. The business is focusing on franchised and managed operations as it transitions to an asset-light model. Revenue is anticipated to increase by 0%-4% in the first quarter of 2025, with franchised and managed revenue growing by 18%-22%. Revenue is anticipated to climb by 2% to 6% in FY25, with franchised and managed revenue rising by 17% to 21%. In 2025, H World Group Limited (NASDAQ:HTHT) aims to close 600 hotels and open 2,300 new ones.
8. DiamondRock Hospitality Company (NYSE:DRH)
Number of Hedge Fund Investors: 30
DiamondRock Hospitality Company (NYSE:DRH) is a real estate investment trust that owns hotel assets. Its operations include purchasing, holding, operating, and remodeling full-service hotel assets in the US. It operates in several cities, including Chicago, Boston, New York, and Denver. Marriott, Starwood, and Hilton comprise the majority of the hotel brands in DiamondRock’s assets. The revenue is distributed into room, food and beverage, and other categories. The majority of the revenue comes from the room segment. The company’s clientele consists of group clients, business transients, and leisure travelers.
In Q4 of 2024, DiamondRock Hospitality Company (NYSE:DRH)’s Urban hotels performed well, with RevPAR up 8.2% and the average daily rate up 5.4%. This was mostly due to a 13.2% RevPAR spike in December in major markets, including Boston, Chicago, Salt Lake, and San Diego. In Q4, group room revenue grew by 8.1% YoY, contributing to a 6.4% increase in food and beverage revenue. Hotel adjusted EBITDA up 16.4% YoY to $75.9 million, while corporate adjusted EBITDA rose by 20% to $68.7 million.
The Bourbon Orleans and Westin San Diego Bay View renovations increased profits and return on investment. In 2025, DiamondRock Hospitality Company (NYSE:DRH) raised the quarterly dividend from $0.03 to $0.08 per share, with the possibility of an additional stub dividend, making it one of the Best Hospitality Stocks.
The company made several smart decisions, such as paying $30 million to acquire the AC Hotel Minneapolis Downtown and selling the Westin Washington D.C. City Center for $92 million. The completion of the Hotel Champlain Burlington’s completion marks a noteworthy development.
7. Hyatt Hotels Corporation (NYSE:H)
Number of Hedge Fund Investors: 35
Hyatt Hotels Corporation (NYSE:H) is ranked seventh on our list of the Best Hospitality Stocks. It is an established name in the global hospitality industry that offers a variety of luxury, leisure, and all-inclusive brands internationally. Its collection of brands includes well-known names including Andaz, Grand Hyatt, and Park Hyatt. By placing itself across multiple market categories to serve a diversified customer, the company strategically concentrates on growing its reach through acquisitions and brand diversification. Its recent priorities include expanding its portfolio through acquisitions and increasing its market share in the all-inclusive industry, catering to both business and leisure guests. Important success factors include a diverse brand portfolio, strategic market positioning, and a balanced revenue model between management, franchising, and ownership.
Hyatt Hotels Corporation (NYSE:H) had a remarkable surge in membership in Q4 of 2024, with World of Hyatt hitting 54 million members (a 22% YoY growth) and co-branded credit card expenditure climbing by 18% YoY. Major U.S. metropolitan markets benefited from a 12% rise in business transient revenue, which drove RevPAR’s 5% Q4 growth and 4.6% year-over-year growth. Park Hyatt London and Grand Hyatt Deer Valley were among the new luxury and lifestyle hotels that opened. The company anticipates a 2%-4% spike in RevPAR and a 6%-7% surge in net rooms by 2025. Gross fees increased 17% to $294 million in Q4, while adjusted EBITDA reached 20%, boosted by $2.9 billion in total liquidity.
The firm has been accelerating its expansion through selective acquisitions and a focus on asset-light operations. Hyatt Hotels Corporation (NYSE:H) intends to strengthen its presence in the all-inclusive market by purchasing Playa Hotels & Resorts. Furthermore, it aims to maintain its asset-light approach by selling owned assets to raise $2 billion in cash by 2027.
6. Wyndham Hotels & Resorts, Inc. (NYSE:WH)
Number of Hedge Fund Investors: 42
One of the biggest hotel franchising firms in the world and the Best Hospitality Stocks, Wyndham Hotels & Resorts, Inc. (NYSE:WH) has a range of midscale or cost-effective brands and partners. It targets leisure tourists in areas with little competition, operating in secondary or tertiary markets. Its franchise concept reduces the requirement for significant financing or capital expenditures.
As of December 31, 2024, Wyndham Hotels & Resorts, Inc. (NYSE:WH) has 903,000 rooms under 20 brands. The largest brand, Super 8, accounts for over 18% of total rooms, followed by Days Inn (13%) and Ramada (14%). The company’s extended stay and lifestyle brands, which appeal to tourists who want to experience the local way of life in a particular place, have grown during the last few years. The business added almost 90,000 rooms when it concluded its acquisition of La Quinta in the second quarter of 2018. In the spring of 2022, the firm introduced ECHO, a new extended-stay economy scale segment concept. The United States accounts for 56% of total rooms.
Wyndham Hotels & Resorts, Inc. (NYSE:WH) opened 69,000 rooms in 2024, a 4% YoY growth and the highest yearly organic expansion in the company’s history. This was accomplished in the fourth quarter of 2024. In line with forecasts, net room growth was 4%, while adjusted EBITDA and EPS climbed by 7% and 10%, respectively. Strong franchisee engagement was shown by the improvement in global retention to 95.7% YoY. International net rooms rose 7% year over year, with substantial growth in Asia Pacific, Latin America, and EMEA. The demand for weekend leisure and blue-collar midweek business drove a 5.3% gain in U.S. RevPAR.
To reach the $4.5 trillion debit market, Wyndham Hotels & Resorts, Inc. (NYSE:WH) launched a co-branded debit card with Galileo, and its membership reached 114 million, up 8% year over year.
5. MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Investors: 47
MGM Resorts International (NYSE:MGM) is included among the Best Hospitality Stocks. It owns casinos in China, Detroit, and Atlantic City and controls the majority of the Las Vegas casino market. Although its primary market is still Las Vegas, it is growing internationally. In 2030, it wants to build a $9 billion casino resort in Osaka, Japan. The firm has aggressively expanded its online betting business beyond its physical casinos with the launch of BetMGM in 2021. BetMGM made $1 billion in revenue in the first half of 2024, showing the success of the company’s investment in digital gambling. Its position in the conventional and online gaming businesses is boosted by this strategic diversification.
MGM Resorts International (NYSE:MGM) smashed all prior records by reaching all-time highs in hotel revenue, F&B revenue, domestic slot win, and consolidated net revenues in 2024. The company had a strong start to 2025, as seen by increased revenue from domestic operations in January and growth forecasts for ADR throughout the year. Operations in Las Vegas were particularly noteworthy, setting new records for December slot handle and win, which contributed to a successful fourth quarter.
MGM Resorts International (NYSE:MGM) had its highest-ever convention reservations in December, surpassing the previous record by 43%. Meanwhile, the firm announced its highest-ever full-year segment-adjusted EBITDA in December, and its market share in China grew to over sixteen percent.
Longleaf Partners Fund stated the following regarding MGM Resorts International (NYSE:MGM) in its Q4 2024 investor letter:
“MGM Resorts International (NYSE:MGM) – Hospitality and gaming company MGM Resorts was a top detractor for the quarter and the year. Despite relatively strong execution by the company and opportunistic repurchases of discounted shares, the market did not like the company’s quarter-to-quarter volatility, especially in the second half of the year. When making the necessary adjustments, MGM’s core Las Vegas properties continued to grow nicely if boringly in the low-mid-single digit range during the year. MGM remains one of our larger share repurchasers in the portfolio, demonstrating its commitment to shareholder returns. The company’s hidden assets in online gaming and Asia also showed progress as the year went on. We remain confident in the management team, led by CEO Bill Hornbuckle, as they navigate these challenges and focus on long-term value creation.”
4. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Investors: 48
VICI Properties Inc. (NYSE:VICI) is a real estate investment trust headquartered in the US. It owns and acquires gambling, hotel, wellness, entertainment, and leisure locations under long-term triple net leases. It has around 93 experiential assets in a geographical portfolio that includes approximately 54 gaming properties and approximately 39 other experiencing properties in the US and Canada, such as the Venetian Resort Las Vegas, Caesars Palace Las Vegas, and MGM Grand.
The company recently revealed its Q4 2024 profits, showing that its revenues of $976 million were 4.7% higher than those of the same time the previous year, making it one of the Best Hospitality Stocks on our list. Earnings per share fell 19.2% to $0.58, while net income available to common stockholders decreased 17.8% year over year to $614.6 million. Changes in the CECL allowance for the quarter ending December 31, 2024, were the main cause of this decline. Moreover, VICI Properties Inc. (NYSE:VICI) formed a new partnership with Indigenous Gaming Partners (IGP) due to IGP purchasing the operational assets of PURE Canadian Gaming. The current master lease for these sites was also amended as part of the arrangement.
Investors are interested in VICI Properties Inc. (NYSE:VICI) because of its unique business strategy. Although its extensive involvement in the gambling industry may seem dangerous, casinos have a history of surviving economic downturns. Long-term leases are used by the corporation to secure tenants, and the highly regulated casino industry makes migration difficult, which adds even more stability. Even during disruptions like the COVID-19 epidemic, which affected the travel, hospitality, and gaming industries, the firm has been able to sustain full occupancy since its initial public offering in 2018. Moreover, a large number of its leases are based on the consumer price index, which enables rental modifications to reflect inflation.
3. Texas Roadhouse, Inc. (NASDAQ:TXRH)
Number of Hedge Fund Investors: 52
Texas Roadhouse, Inc. (NASDAQ:TXRH) was established in 1993 and is a popular family-friendly casual dining establishment. Over 750 outlets are run by the restaurant chain and its franchises. Although the company has expanded internationally, the majority of its restaurants are located in the United States.
The restaurant business is challenging, particularly in light of rising labor, food, and insurance expenses. Nonetheless, Texas Roadhouse, Inc. (NASDAQ:TXRH) is one of the companies best equipped to handle those challenges. It pays dividends to stockholders, has a strong profit margin, and has an excellent management team.
The company expanded in 2024 despite a challenging economic situation. In 2024, Texas Roadhouse, Inc. (NASDAQ:TXRH) recorded historic revenue growth, totaling over $5.4 billion, with average unit volume exceeding $8 million for the first time in company history. A 4.4% YoY increase in traffic was the primary driver of an 8.5% increase in same-store sales. Profits per share increased by 42.5%, and operating cash flow topped $750 million.
Texas Roadhouse, Inc. (NASDAQ:TXRH) increased its network by launching 31 company-owned restaurants and 11 overseas franchise sites, with plans to add 30 more in 2025. A $500 million share repurchase program and an 11% dividend increase were also announced, which improved shareholder returns. The firm also progressed its digital transformation by improving guest management and kitchen efficiency.
2. Marriott International, Inc. (NASDAQ:MAR)
Number of Hedge Fund Investors: 69
One of the Best Hospitality Stocks, Marriott International, Inc. (NASDAQ:MAR) has the potential for long-term growth due to its robust portfolio of brands, wide economic moat, and industry-leading loyalty program. The demand for its hotels is still high despite declining U.S. savings and ongoing inflation. The addition of StudioRes, City Express, and Four Points broadens its midscale and extended-stay presence, while the Sonder collaboration adds 10,000 rooms to its alternative lodgings market. Hotel owners are drawn to the firm’s 228 million-member loyalty program, which boosts market share.
Its luxury presence was reinforced by the 2016 Starwood acquisition, and its Las Vegas presence has been strengthened by the 2023 MGM partnership. Marriott International, Inc. (NASDAQ:MAR) ‘s long-term growth and competitive advantage in the hospitality industry are supported by these factors.
Marriott International, Inc. (NASDAQ:MAR) performed well in 2024, growing net rooms by 6.8% and global RevPAR by more than 4%. In Q4 of 2024, international RevPAR climbed 7%, driven by a 4% rise in ADR and a 2 percentage point increase in occupancy. APAC, EMEA, and cross-border demand were particularly strong. Marriott International, Inc. (NASDAQ:MAR) signed a record 1,200+ acquisitions, increased its luxury portfolio, and grew its pipeline to 577,000 rooms. Marriott Bonvoy’s membership grew by 31 million, reaching 228 million, and app downloads jumped by 30%. Financially, improved RevPAR and room additions drove a 7% spike in gross fee revenues and adjusted EBITDA.
1. Hilton Worldwide Holdings Inc. (NYSE:HLT)
Number of Hedge Fund Investors: 79
The Best Hospitality Stock, Hilton Worldwide Holdings Inc. (NYSE:HLT) is also one of the biggest hotel firms in the world, with over 8,300 hotels worldwide. Its varied portfolio comprises several midscale and premium hotels, as well as the luxury brands Waldorf Astoria and Conrad Hotels. Moreover, it has over 200 million members in its Hilton Honors loyalty program.
Hilton Worldwide Holdings Inc. (NYSE:HLT) has reported impressive results, similar to other major travel and tourism stocks, as a result of rising travel demand. In Q4 2024, the company saw sales growth that set a new high. The quarter saw 4.45% YoY growth in revenue. Adjusted EBITDA surpassed $3.4 billion, up 11% from the previous year, because of strong net unit expansion. The business’s expansion strategy and fee-based model are still profitable. The firm produced $150 million in dividends for the year, along with $3 billion in shareholder returns for the quarter.
The fact that Hilton Worldwide Holdings Inc. (NYSE:HLT) has historically placed a high priority on expansion is another positive sign for investors. In 2024, it achieved record net unit growth of 7.3% by opening more rooms than ever before, adding the most rooms in its history, and entering new markets like Australia, Paraguay, and Bonaire with new brands and strategic alliances.
Stephen Grambling, a Morgan Stanley analyst, raised his price objective on Hilton Worldwide Holdings Inc. (NYSE:HLT) from $265 to $274. The firm advises investors to stick with businesses that can sustain or even grow in-construction pipelines with limited usage of capital, pointing out that 2025 outlooks in the lodging industry are similar to 2024 in that they have low RevPAR, consistent net unit growth, but a challenging development backdrop.
Overall, Hilton Worldwide Holdings Inc. (NYSE:HLT) ranks first on our list of the 10 Best Hospitality Stocks to Buy According to Hedge Funds. While we acknowledge the potential for HLT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HLT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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