A powerful cyclical recovery is lifting hotel earnings, prompting a near-daily parade of upward estimate revisions by analysts. The rally will face its first big test this summer, however, when year-over-year comparisons get tougher. For much of 2004, hotel stocks have been red-hot as company executives have turned bullish on the prospects of a recovery. Occupancy rates have started to tick up, allowing operators to raise room rates. With year-ago results weak due to the war in Iraq, companies have posted double-digit percentage gains to revenue per available room, or "revpar," a key metric. Indeed, in the week ending June 19, revpar at all U.S. hotels rose 5.4% with upper upscale revpar growth coming in at 7.3%, according to Smith Travel Research. In the same week a year earlier, revpar actually fell 1%, but next week, during the first full week of the summer travel season, these easy comparisons come to an end. "Given stable and healthy leisure demand over the past couple of years, and a higher mix of leisure travel over the summer months, we believe comparisons could decelerate compared to high-single-digit/double-digit comparisons enjoyed throughout the spring of 2004," said Jeremy Cogan, analyst at Banc of America Securities, in a note. With the Dow Jones Hotel Index up 12.6% year to date, driven by a 22.4% gain in industry front-runner Starwood Hotels ( HOT), valuations are not necessarily cheap -- and investors may get skittish upon seeing smaller, steadier growth instead of the eye-popping numbers posted earlier this year. That said, analyst ratings and earnings estimates continue to rise ahead of the release of second-quarter hotel earnings in mid-July. Two brokerages have upgraded Marriott International ( MAR) in the last two weeks, with five analysts raising their 2004 estimates in the last month. Over the last 30 days, not a single analyst has reduced 2004 earnings expectations on Marriott, Hilton Hotels ( HLT) or Four Seasons ( FS).