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LIVE MARKETS-$200 billion luxury hotel market leaves luxury goods behind - Morgan Stanley

By Reuters News

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$200 BILLION LUXURY HOTEL MARKET LEAVES LUXURY GOODS BEHIND - MORGAN STANLEY

Luxury hospitality has overtaken luxury goods as a market opportunity, with annual revenue from luxury hotels reaching about $200 billion, prompting Morgan Stanley to favor major hotel operators as beneficiaries of a structural shift in consumer spending toward experiences.

Broader luxury hospitality revenue has risen to about $415 billion when including villas, branded residences, fine dining, private aviation, yachts and cruises, said analysts at Morgan Stanley led by Jamie Rollo.

Luxury hospitality is now marginally larger than the luxury goods market, which Morgan Stanley estimates at $408 billion, highlighting how affluent consumers are increasingly directing discretionary spending toward travel and experiences rather than physical products.

Luxury hotel demand growth appears "partly structural, not just cyclical," supported by rising global wealth, favorable demographics and relatively limited exposure to China compared with luxury goods companies, the brokerage said in a note dated October 27.

According to Morgan Stanley, luxury hotel revenue per available room in the United States and Europe was up about 8% year-to-date in 2026, while revenue growth at major listed luxury goods companies was about 2% in the first half.

The brokerage also sees the trend strengthening the investment case for global operators such as Marriott International MAR.O, Hilton Worldwide, Hyatt Hotels H.N, InterContinental Hotels Group IHG.L and Accor.

Among stocks under coverage, the brokerage said Hilton leads on luxury and lifestyle growth potential while Accor offers one of the strongest exposure profiles. "Hilton and Accor are our preferred ways to play the luxury theme," Rollo wrote, citing strong development pipelines and favorable fee-growth prospects.

(Akriti Shah)

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