For Immediate Release
Chicago, IL – July 2, 2026 – Today, Zacks Equity Research discusses Life Time Group Holdings, Inc. LTH, Atour Lifestyle Holdings Ltd. ATAT, Lindblad Expeditions Holdings, Inc. LIND and The Marcus Corp. MCS.
Industry: Leisure & Recreation
Link: https://www.zacks.com/commentary/2945974/4-leisure-recreation-services-stocks-to-buy-amid-industry-challenges
The Zacks Leisure and Recreation Services continues to face pressure from cautious discretionary spending amid persistent inflation and macroeconomic uncertainty. Elevated labor costs and higher interest expenses remain key challenges, weighing on margins and limiting investment capacity for some operators.
However, companies are benefiting from ongoing digital initiatives, strategic partnerships and operational efficiencies that are supporting profitability. Robust demand for live entertainment, resilient cruise bookings and steady leisure travel trends continue to provide a solid tailwind for the industry. Firms such as Life Time Group Holdings, Inc., Atour Lifestyle Holdings Ltd., Lindblad Expeditions Holdings, Inc. and The Marcus Corp. are likely to benefit from the trends mentioned above.
Industry Description
The Zacks Leisure and Recreation Services industry comprises various recreation providers, such as cruise, entertainment and media owners, golf-related leisure and entertainment venue businesses and theme park makers, resort operators and event organizers. Some industry players have ski and sports businesses, while some operate health and wellness centers onboard cruise ships and at destination resorts.
Many companies are engaged in hospitality and related businesses. A few industry participants also provide weight management products and services. These companies primarily thrive on overall economic growth, which fuels consumer demand for products. Demand, which is highly dependent on business cycles, is driven by a healthy labor market, rising wages and growing disposable income.
5 Trends Shaping the Leisure & Recreation Services Industry's Future
Macroeconomic Pressure and Cautious Consumer Spending: The industry remains highly sensitive to economic conditions. Persistent inflation and macroeconomic uncertainty have made consumers more selective in their discretionary spending. While demand for premium travel and experiences has remained resilient, some households continue to moderate spending on leisure and recreation, affecting attendance and customer spending in certain segments.
Rising Labor and Operating Costs: Leisure and recreation businesses remain labor-intensive, with elevated wages and ongoing labor costs weighing on profitability. In addition, expenses related to utilities, food, maintenance and marketing continue to increase. These cost pressures are squeezing margins and encouraging companies to improve operating efficiency while selectively passing higher costs on to consumers.
Robust Demand Supports Cruise Operators: Cruise operators continue to benefit from healthy consumer demand, strong booking trends and resilient pricing across North American and European itineraries. Higher onboard spending and premium offerings are also supporting revenue growth and profitability.
Digital Tools Improving Engagement: Companies continue to invest in online booking platforms, mobile applications and personalized marketing to enhance customer engagement. At the same time, data analytics and automation are improving staffing, scheduling and capacity management, helping operators boost efficiency and support margins.
Premium Experiences and Membership Models Drive Revenues: Leisure operators are expanding premium offerings, bundled packages and membership programs to increase customer spending and strengthen loyalty. These higher-value experiences and recurring revenue models help improve profitability while reducing reliance on volume growth alone.
Macroeconomic Pressure and Cautious Consumer Spending: The industry remains highly sensitive to economic conditions. Persistent inflation and macroeconomic uncertainty have made consumers more selective in their discretionary spending. While demand for premium travel and experiences has remained resilient, some households continue to moderate spending on leisure and recreation, affecting attendance and customer spending in certain segments.
Rising Labor and Operating Costs: Leisure and recreation businesses remain labor-intensive, with elevated wages and ongoing labor costs weighing on profitability. In addition, expenses related to utilities, food, maintenance and marketing continue to increase. These cost pressures are squeezing margins and encouraging companies to improve operating efficiency while selectively passing higher costs on to consumers.
Robust Demand Supports Cruise Operators: Cruise operators continue to benefit from healthy consumer demand, strong booking trends and resilient pricing across North American and European itineraries. Higher onboard spending and premium offerings are also supporting revenue growth and profitability.
Digital Tools Improving Engagement: Companies continue to invest in online booking platforms, mobile applications and personalized marketing to enhance customer engagement. At the same time, data analytics and automation are improving staffing, scheduling and capacity management, helping operators boost efficiency and support margins.
Premium Experiences and Membership Models Drive Revenues: Leisure operators are expanding premium offerings, bundled packages and membership programs to increase customer spending and strengthen loyalty. These higher-value experiences and recurring revenue models help improve profitability while reducing reliance on volume growth alone.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Leisure and Recreation Services industry is grouped within the broader Zacks Consumer Discretionary sector. The industry carries a Zacks Industry Rank of #195, placing it in the bottom 21% of 246 Zacks industries.
The group's Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright, near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by more than two to one.
The industry's position in the top 50% of the Zacks-ranked industries results from a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in the group's earnings growth potential.
Before we present a few stocks that investors can consider, let us analyze the industry's recent stock-market performance and valuation picture.
Industry Outperforms the Sector
The Zacks Leisure and Recreation Services industry has underperformed the Zacks S&P 500 composite but outperformed its sector in the past year. Stocks in the industry have collectively grown 4.2% in the past year against the broader sector's decline of 15.3%. The S&P 500 has risen 23.7% in the same time frame.
Valuation
Based on the forward 12-month P/S, the industry trades at 2.67X compared with the S&P 500's 5.06X and the sector's 2.35X. In the past five years, the industry has traded as high as 4.64X and as low as 1.80X, the median being 2.31X.
4 Leisure & Recreation Services Stocks to Keep an Eye On
Atour Lifestyle Holdings: The company is benefiting from resilient travel demand in China, steady expansion of its hotel network and a growing mix of managed hotels. Higher brand recognition, increasing membership engagement and strong growth in its retail business are further supporting revenue and earnings growth.
Shares of this Zacks Rank #1 (Strong Buy) company have declined 3.6% in the past year. The company's sales and earnings in 2026 are likely to witness growth of 40.2% and 26.7%, respectively. You can see the complete list of today's Zacks #1 Rank stocks here.
Marcus: The company is benefiting from resilient demand for moviegoing and out-of-home entertainment, improving box office performance and steady attendance at its theaters and hotels.
Shares of this Zacks Rank #1 company have gained 37.2% in the past year. In 2026, MCS' sales and earnings are expected to witness year-over-year growth of 5.7% and 722.2%, respectively.
Life Time Group Holdings: The company is benefiting from resilient demand for premium fitness and wellness services, higher membership dues and increased spending on in-center offerings. Continued club expansion, growing digital engagement and operational efficiencies are further supporting revenue growth and profitability.
Shares of this Zacks Rank #2 (Buy) company have surged 39.3% in the past year. In 2026, LTH's sales and earnings are expected to witness year-over-year growth of 11.2% and 17.5%, respectively.
Lindblad Expeditions Holdings: The company is benefiting from strong demand for expedition travel, healthy booking trends and premium pricing. Fleet expansion, higher occupancy and increased demand for experiential and adventure tourism are supporting revenue growth and improving profitability.
Shares of this Zacks Rank #2 company have jumped 123.5% in the past year. In 2026, LIND's sales and earnings are expected to witness year-over-year growth of 10.1% and 130.8%, respectively.
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Marcus Corporation (The) (MCS): Free Stock Analysis Report
Lindblad Expeditions (LIND): Free Stock Analysis Report
Life Time Group Holdings, Inc. (LTH): Free Stock Analysis Report
Atour Lifestyle Holdings Limited Sponsored ADR (ATAT): Free Stock Analysis Report
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