H World Group (HTHT) stock is soaring 5.23% in pre-market trading on Monday, as investors react positively to improving trends in the hotel industry and analyst expectations of strong third-quarter results.

According to a recent Morgan Stanley research report, the decline in revenue per available room (RevPAR) for the hotel industry narrowed in Q3, driven by better-than-expected performance in September. This positive momentum has extended into October and is likely to continue into Q4. The bank expects H World Group to outperform expectations in Q3, demonstrating favorable RevPAR trends and operational leverage benefits.

Looking ahead, industry analysts are optimistic about the hotel sector's prospects. Guosen Securities noted that the hotel industry's Q3 RevPAR decline continued to narrow sequentially, highlighting improving cyclical conditions and operational momentum. For the coming year, industry supply growth is expected to moderate, while potential policy-driven business travel recovery and flexible leisure travel arrangements could lead to earlier valuation recovery ahead of the industry cycle turning point.