RLJ Stock Forecast & Price Target

RLJ Lodging Trust is experiencing positive momentum as evidenced by a 5.8% year-over-year growth in January RevPAR, indicating strong demand in its hotel operations. The company's strategic affiliations, particularly the Tapestry brand with Hilton, alongside ongoing conversions of legacy Wyndham properties, position it well to capitalize on expected rebounds in business travel and elevated group demand. Furthermore, projections of GDP growth, particularly in urban markets, support the outlook for improved occupancy and average daily rates, reinforcing the potential for enhanced profitability within RLJ’s focused-service and compact full-service hotel segments.

RLJ Lodging Trust faces significant challenges as occupancy levels remain down 4% compared to the same week in 2019, reflecting persistent deficits particularly in urban markets where the company operates. Factors such as delays in conversion completions, investor concerns regarding urban non-leisure assets, and a prolonged decline in business travel contribute to a negative outlook for revenue growth, as RevPAR in many markets remains close to or below pre-pandemic levels. Additionally, low labor availability further undermines operational efficiency and guest experience, exacerbating the company's struggles as it navigates an environment of uncertain economic recovery and changing travel dynamics.