(FORTUNE Magazine) – If you've noticed a little more hustle and bustle at your fave vacation hot spot this summer, you're not imagining things. Hotels are filling up faster than they have in several years. According to Smith Travel Research, the average revenue per available room, a standard industry measure of hotel success, rose 7% from May 2003 to May 2004. The occupancy rate in May was 62%, the highest level in more than two years. And hotel stocks--which suffered mightily over the past few years because of the economic downturn, the 9/11 terrorist attacks, and the war in Iraq, among other events--have rebounded along with room service bills. The S&P hotel index has gained 40% over the past year, vs. a 13% rise for the S&P 500.

Most analysts think a continuing economic recovery will move hotel stocks even higher, but shares have gotten pricey. At $62, Four Seasons has a price/earnings ratio of 54. And Hilton and Starwood are each trading above 40 times trailing earnings. That leaves Marriott International (MAR, $50), with a P/E of 23, as the closest thing to a bargain. In early July the hotel operator--with brands ranging from Ritz-Carlton to Fairfield Inn--trounced analysts' earnings expectations. And J.P. Morgan analyst Harry Curtis believes Marriott, which is adding some 30,000 new rooms this year, will have the leverage to grow profit margins by increasing prices in the fall. That makes it a stock worth checking into. --Christine Y. Chen