We recently published a list of the 12 Best Hotel Stocks To Buy According to Analysts. In this article, we are going to take a look at where RLJ Lodging Trust (NYSE:RLJ) stands against other best hotel stocks to buy according to analysts.
Overview of the Hospitality Industry
The hospitality industry is undergoing a significant transformation after the post-Covid travel rebound. According to a report by Zion Market Research, the global hotel market is valued at $1.37 trillion as of 2023. It is expected to reach $2.99 trillion by 2032, growing at a compound annual growth rate of 9.14% between 2024 and 2032. This growth is attributed to the surging travel demand post-Covid, resurgence in leisure and business activities, and increased disposable incomes.
Released in January 2025, the “State of the Hospitality Market Report 2024” provides a deeper view of the global hospitality industry. The report showed a significant rise from $3.44 trillion in 2023 to $3.98 trillion in 2024, translating to a compound annual growth rate of 15.5%. This notable growth highlights positive trends across transportation and infrastructure improvements, the increasing influence of international hotel chains, and the growing popularity of experiential travel. In addition, the rising economic influence of the middle class in emerging markets and ballooning demand for unique experiences is further boosting this expansion. According to the report, North America is the most significant force in the hospitality market as of 2023. However, the Asia-Pacific region is anticipated to grow fastest in the coming years.
The US hospitality industry reflects similar trends. According to a report by Mordor Intelligence, the industry is estimated to have a market size of around $247.45 billion as of 2025. It is anticipated to grow at a compound annual growth rate of 4.87% between 2025 and 2030, reaching $313.87 billion by the end of the forecast period.
Increased Optimism Among US Hotel Investors
A survey regarding US hotel investors’ sentiment conducted by the CBRE Group and released on January 28 showed increased positive optimism among hotel investors. Around 94% of those surveyed expressed intentions to maintain or increase their hotel investments in 2025, a rise from 85% last year. The most prominent reason behind this growth was an optimistic outlook for total returns and distressed investment opportunities. The central business districts (CBDs) and resorts were the most commonly favored location types for 2025 among investors. The most popular chain scales were the higher-priced options.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 30 hotel stocks. We checked their upside potential, according to analysts, and then selected the top 12 most popular stocks among elite hedge funds as of Q3 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of analysts’ average upside potential. Please note that the analyst upside potential data is as of February 12, 2025.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An aerial view of a hotel, its roofs and balconies spread out before a beautiful landscape.
RLJ Lodging Trust (NYSE:RLJ)
Analyst Upside Potential: 21.37%
Number of Hedge Fund Holders: 20
RLJ Lodging Trust (NYSE:RLJ) is a self-administered and self-advised real estate investment trust that owns room-oriented, premium-branded hotels. It owns around 98 hotel properties with approximately 21,610 rooms in 23 US states and the District of Columbia. The company’s brand affiliations include Marriott, Hilton, and others.
The company’s 2% RevPAR growth in fiscal Q3 2024 once again exceeded the industry. Its growth rate was two times that of the industry, and it continues to be balanced between both occupancy and rate. This reflects the resilience of the company’s urban-centric portfolio, which lends it a competitive advantage and allows it to outperform. Its effective expense management also allowed it to drive EBITDA growth that exceeded its year-over-year RevPAR growth. RLJ Lodging Trust’s (NYSE:RLJ) hotels gained 100 basis points of market share in fiscal Q3 2024, representing the sixth consecutive quarter of outperformance.
RLJ Lodging Trust (NYSE:RLJ) is also making meaningful progress across its key initiatives. These include completing two conversions, successfully refinancing its near-term debt maturities, and increasing its quarterly dividend by 50%. It ranks 10th on our list, and its median price target of $9.47 implies an upside of 21.37% from current levels.
Overall, RLJ ranks 10th on our list of best hotel stocks to buy according to analysts. While we acknowledge the potential of RLJ, our conviction lies in the belief that 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 RLJ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
