With the first-quarter earnings season underway, early reports are grabbing investors' attention for reporting solid profits. Rather than chasing stocks that have already surged on solid reports, consider targeting companies positioned for positive surprises. Earnings beats often act as catalysts, lifting confidence and driving shares higher.
This is likely to be reflected in the earnings releases of Chatham Lodging Trust REIT CLDT, Host Hotels & Resorts HST, Park Hotels & Resorts PK and DiamondRock Hospitality DRH.
REITs play a vital role in both the physical and digital sides of the economy and often show resilience even in challenging markets. Taking a closer look at the sector’s fundamentals can help investors spot areas of steady performance and long-term growth potential. Here’s a look at where the industry’s strengths lie and how it could still present value amid broader market uncertainty.
Particularly, the hotel industry demonstrated resilient growth in the first quarter of 2026. According to CBRE data, overall hotel occupancy increased 0.8% year over year as demand growth of 2% surpassed the 0.6% rise in supply in the quarter. Revenue per available room (RevPAR) climbed 3.8% year over year, bolstered by a 2.2% increase in the average daily rate (ADR), with real (inflation-adjusted) RevPAR growth settling at 1% after accounting for a 2.7% inflation rate.
Performance varied significantly across regions in the quarter, with San Francisco experiencing a notable 31% surge in RevPAR fueled by AI-sector corporate travel, while New Orleans saw a 20% decline in RevPAR following last year’s Super Bowl surge in demand. Despite these regional shifts, the sector faces upward pressure from rising labor costs, as hotel wages grew by 4.2% in the first quarter of 2026, outpacing the broader 3.6% national wage growth.
The Zacks Methodology
Picking the right stock could be difficult unless one knows the proper method. To make the task simple, we rely on the Zacks methodology, combining a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP.
Our proprietary methodology, Earnings ESP, shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Research shows that for stocks with this combination of the Zacks Rank and ESP, chances of a positive earnings surprise are as high as 70%.
Here are four Hotel REITs that have the right combination of elements to deliver positive surprises this earnings season.
Chatham Lodging Trust currently has an Earnings ESP of +3.23% and sports a Zacks Rank of #1. Over the trailing four quarters, the company’s funds from operations (FFO) per share surpassed the Zacks Consensus Estimate on three occasions and missed on the other, the average beat being 11.21%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Chatham Lodging Trust (REIT) Price and EPS Surprise
Chatham Lodging Trust (REIT) price-eps-surprise | Chatham Lodging Trust (REIT) Quote
Chatham Lodging is expected to have benefited from its scaled portfolio of upscale extended stay and premium branded select service hotels in key markets. The company’s track record of outperforming the industry suggests that the first quarter could see stabilization or slight upward momentum in occupancies and rates. A focus on hotel asset quality is likely to have helped the revenues trend positively. The recent 11% dividend hike reinforces income appeal and management’s optimism about sustainable earnings power. Also, the hotel REIT is expected to continue enjoying balance sheet strength.
Chatham Lodging is slated to report first-quarter 2026 results on May 7, before market open.
The Zacks Consensus Estimate for quarterly revenues is presently pegged at $65.17 million, which indicates a decrease of 5.06% year over year. The consensus mark for the quarterly FFO per share is pegged at 16 cents, which indicates 14.29% year-over-year growth.
Host Hotels & Resorts currently has an Earnings ESP of +2.41% and carries a Zacks Rank of #3. Over the trailing four quarters, the company’s adjusted funds from operations (AFFO) per share outpaced the Zacks Consensus Estimate on all occasions, with the average beat being 10.65%.
Host Hotels & Resorts, Inc. Price and EPS Surprise
Host Hotels & Resorts, Inc. price-eps-surprise | Host Hotels & Resorts, Inc. Quote
Host Hotels is likely to have gained by its portfolio of luxury and upper-scale hotels across the top U.S. Markets and the Sunbelt region. The improvement in group and transient demand, including leisure and resort, is expected to have aided hotel RevPAR growth in the to-be-reported quarter. The company’s strategic capital allocations are likely to have improved portfolio quality and strengthened its position in key U.S. markets, where it has a greater scale and competitive advantage. This is likely to have given it an edge and driven margin expansion. However, high interest expenses are likely to have been a spoilsport for HST during the to-be-reported quarter.
Host Hotels is scheduled to release its first-quarter earnings on May. 6, after market close.
The Zacks Consensus Estimate for quarterly revenues is pegged at $1.63 billion, which suggests a 2.02% increase from the year-ago quarter’s reported figure. While the consensus mark for first-quarter 2026 AFFO per share is pegged at 62 cents, implying a 3.13% decrease year over year.
Park Hotels & Resorts has an Earnings ESP of +2.27% and carries a Zacks Rank #3 at present. Over the trailing four quarters, PK’s FFO per share surpassed the Zacks Consensus Estimate thrice and missed in the remaining period, with the average beat being 5.12%.
Park Hotels & Resorts Inc. Price and EPS Surprise
Park Hotels & Resorts Inc. price-eps-surprise | Park Hotels & Resorts Inc. Quote
Park Hotels is expected to have gained from its diverse portfolio of hotels and resorts. The company is likely to report RevPAR growth, driven by sustained leisure demand and stabilizing group bookings as supply pressures ease in key markets. Looking ahead, the company stands to capitalize on premium pricing power and operational efficiencies. As asset sales advance smoothly, PK is strengthening its balance sheet, unlocking capital for strategic reinvestments, and positioning for accelerated, long-term growth.
Park Hotels is scheduled to report its quarterly figures on April 30, after market close.
The Zacks Consensus Estimate for first-quarter total revenues is pegged at $614.63 million, indicating a 2.44% decrease year over year. The consensus mark for the quarterly FFO per share stands at 40 cents, suggesting a 13.04% decrease year over year.
DiamondRock Hospitality currently has an Earnings ESP of +1.78% and carries a Zacks Rank of #3. Over the trailing four quarters, the company’s FFO per share surpassed the Zacks Consensus Estimate on all occasions, the average beat being 11.58%.
DiamondRock Hospitality Company Price and EPS Surprise
DiamondRock Hospitality Company price-eps-surprise | DiamondRock Hospitality Company Quote
DiamondRock Hospitality is positioned to benefit from its geographically diversified portfolio of premium hotels concentrated in leisure destinations and top gateway markets. A cleaner balance sheet following 2025 refinancings and stronger group and resort demand trends, including higher pricing in premium leisure markets, supports the to-be-reported quarter results. However, management explicitly guided first-quarter 2026 RevPAR to be "essentially flat" year-over-year, describing it as the toughest comparison of the year.
DiamondRock Hospitality is slated to report first-quarter 2026 results on April 30, after market close.
The Zacks Consensus Estimate for quarterly revenues is presently pegged at $255.94 million, which indicates an increase of 0.43% year over year. The consensus mark for the quarterly FFO per share is pegged at 19 cents, which remains unchanged year over year.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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See them now >>Host Hotels & Resorts, Inc. (HST) : Free Stock Analysis Report
DiamondRock Hospitality Company (DRH) : Free Stock Analysis Report
Chatham Lodging Trust (REIT) (CLDT) : Free Stock Analysis Report
Park Hotels & Resorts Inc. (PK) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
