Hotel stocks have rallied recently after fears of a severe slowdown in the upscale part of the sector led to a selloff in July.

Recent earnings calls from hotel management teams have painted a different picture of the lodging environment, perhaps signaling that investor fears of a widespread slowdown might be overdone.

On the company's earnings call Tuesday,


(HLT) - Get Report

executives said demand remains strong at the company's hotels. They also stressed that the lack of new supply continues to benefit the sector.

"I've been in this business a long time, as all of us have, and the times when you really get worried about economic fundamentals is when there is obvious oversupply, and we have lived through times where there is oversupply and continued construction. And there is nothing like that going. So we are sanguine," Hilton CEO Steve Bollenbach told investors on the call.

He implied that markets like New York and Hawaii will continue to see strong results for some time since new supply is low and new entitlements can take years to be approved. As well, a number of hotels left the market and were converted to residential use, he said.

"We are in such favorable shape there that I think even with the various upsets in the market, the rising interest rates, the fear of inflation, I just don't think that that is going to have a big impact on us going forward," Bollenbach added.

The company said it hasn't seen any weakness coming through its distribution channels and said reservation activity continues to be strong. Hilton said it had a record week in the third week in July, with reservations up 18% from the prior year.

Last week, Starwood executives said they also continue to

see strong bookings, but the stock dropped 5% after it reported earnings that day. The stock has since rallied back a bit, and was up 1.5% to $53.80 Wednesday.

Hilton shares were up 2.2% to $24.70 Wednesday.

Four Seasons

( FS), which reports earnings next week, rose 4.5% to $55.97.

"The lodging cycle remains in solid shape and remains insulated from some of the broader consumer fears plaguing the market," Susquehanna Financial analyst Robert LaFleur said in a recent research note. "Supply, demand, and pricing trends all remain positive, and should remain so for several years."

The only upscale hotel owner that has admitted some weakness of late is

LaSalle Hotel Properties


, which cited softness in leisure demand in June.

Investors will get more news on the sector when

Sunstone Hotel Investors

(SHO) - Get Report

reports earnings after the market close Wednesday.

The bear case for the sector says high oil prices, rising interest rates and a tapped-out consumer significantly increase the risk of a material economic slowdown, LaFleur says.

"If the slowdown is severe enough, the second derivative impact on corporate profits will overwhelm the positive trends in corporate capital spending we expect over the next few years, and the earnings estimates in our lodging universe will prove to be too high and the multiples will have to come down in order to sufficiently reflect the risks," LaFleur says.