The bank lowered its RevPAR forecast by 125 basis points,
citing softer corporate and inbound travel, especially from Canada.
NATIONAL REPORT – Goldman Sachs on Monday downgraded its
2025 RevPAR forecast for U.S. lodging C-Corps by approximately 125 basis points
due to growing economic and geopolitical uncertainties.
Despite resilient TSA throughput, Goldman analyst Lizzie
Dove cited a decline in Canadian tourism and reduced government travel, which
are expected to impact U.S. RevPAR negatively.
The bank said it now expects U.S. hotels’ average RevPAR to grow
0.4% in 2025, down from its prior estimate of 1.4%. As a result, Goldman
analysts dropped their rating for Hyatt Hotels stock to “sell,” and downgraded
Marriott International and Hilton Worldwide to “neutral.”
At the same time, the analyst upgraded the shares of Choice
Hotels International from sell to buy and lowered the price forecast from $141
to $138. The upgrade was done due to its defensive position, primarily driven
by its franchise revenue structure and strong balance sheet.
Airline warnings on domestic demand, alongside weaker
foreign arrivals after new tariff announcements, have placed additional
pressure on the sector with Goldman believing hotel trends are likely to follow
airline weakness, particularly in RevPAR and incentive management fee-related
revenue.
The updated forecast does not account for a recession,
Goldman said, which “would likely drive further downside.” The bank currently
places the odds of a recession at 45%.
Lodging stocks have underperformed in recent
months, with Hyatt down 32%, Marriott off 27%, and Hilton falling 21%, compared
to a 13% decline in the S&P 500.