Hotel REITs own hotel and resort properties, leasing them to brand operators (Marriott, Hilton, Hyatt) under long-term management agreements. Unlike other REITs with long-term leases, hotel revenue reprices daily — making them the most economically sensitive real estate sector. Leisure travel demand has been exceptional post-pandemic, driving RevPAR to record levels. Group and business travel recovery has further supported urban hotel performance. High fixed costs make hotel REITs operationally leveraged to RevPAR swings.
RevPAR growth and margin expansion from operating leverage. Watch ADR (Average Daily Rate) vs. occupancy decomposition — rate-driven growth is higher quality. Group booking pace and forward room night reservations signal business travel recovery. Hotel brand mix (luxury vs select-service) affects RevPAR sensitivity.