HWORLD-S (01179) shares surged 5.75% during intraday trading on Monday, reaching HK$33.1, as investors reacted positively to improving trends in the hotel industry and upbeat analyst forecasts. The stock saw robust trading activity with a volume of HK$64.37 million, reflecting strong market interest.

The rally comes on the heels of a recent Morgan Stanley research report highlighting a narrowing decline in revenue per available room (RevPAR) for the hotel industry in Q3, particularly driven by better-than-expected performance in September. The positive momentum has reportedly extended into October and is expected to continue through Q4. Morgan Stanley anticipates HWORLD-S to outperform expectations in Q3, citing favorable RevPAR trends and benefits from operational leverage.

Looking ahead, the outlook for HWORLD-S and the broader hotel industry appears promising. Guosen Securities noted that the hotel industry's RevPAR decline continued to narrow sequentially, indicating improving cyclical conditions and operational momentum. Industry experts project a moderate decline of 0-3% in Q4, with potential for earlier valuation recovery in the coming year. Factors contributing to this optimistic outlook include expected moderation in industry supply growth, potential policy-driven business travel recovery, and flexible leisure travel arrangements.