As much as I might lament my former life as a Wall Street analyst, I have to admit that there were certain aspects of the gig that didn't stink. High among them was staying at places like Four Seasons' (NYSE:FS) Pierre Hotel in New York City.

Anyone who's stayed at a Four Seasons hotel knows what I'm talking about -- the places are just fantastic, and the service is top notch. Investors in Four Seasons' stock, though, aren't feeling quite as fabulous about Wall Street's reaction to the hotelier's fourth-quarter report.

While REVPAR (that's revenue-per-available-room) was up 10.7% for the quarter, total revenue was down almost 4%. Due in part to problems with incentive fees and currency translation, earnings came in at about $0.34 -- well below the $0.44 Wall Street guesstimate. If you can overlook the estimates, though, net income still grew at more than 33% over the prior year.

Aside from the "disappointing" earnings, the fourth quarter was pretty good. With the exception of properties in the Caribbean, the company experienced double-digit REVPAR growth across all of its various global properties. Occupancy was also strong: The worldwide figure came in at 69% for the quarter -- up from 66% a year ago.

Hotels, in general, have been doing well of late. Improving occupancy and revenue have boosted other lodging operators, such as Marriot (NYSE:MAR), Starwood (NYSE:HOT), and even more budget-priced companies like Choice Hotels (NYSE:CHH). That said, the travel and tourism market really hasn't fully recovered yet. A full recovery in leisure travel would be a boon to Four Seasons, as this luxury retailer truly comes into its own when people are a bit more profligate with their spending.

Luckily, the company resisted the urge to go down-market just to fill rooms when times were tough. After all, reputations are hard to build but easy to destroy, and the people who make up the bulk of Four Seasons' clientele don't really want to rub shoulders with bargain travelers. By maintaining their image, Four Seasons should reap considerable rewards when the economies in Western Europe and in countries like the U.S. and Japan really get going again.

Perhaps befitting the hotels' chichi reputations, Four Seasons sports a luxurious valuation. There are all manner of ways to value hotel stocks and the approaches range from the sublime to the ridiculous. No matter what metric you choose, though, Four Seasons is not cheap.

Although high valuations don't stop stocks from climbing higher when the earnings momentum is intact, high valuations do generally shrink the margin of safety. As investors saw today, even a one-quarter slip-up can make less courageous shareholders look for an early checkout.

Fool contributor Stephen Simpson, CFA, has no ownership interest in any stocks mentioned.