CoStar, Tourism Economics upgrade U.S. hotel growth forecast

CoStar and Tourism Economics made significant upward adjustments to the 2026-27 U.S. hotel forecast just released at the 18th Annual Hotel Data Conference.

For 2026, projected gains in average daily rate (ADR) and revenue per available room (RevPAR) were upgraded 1.1 ppts and 1.6 ppts, respectively. Occupancy was lifted to 63.1% – a 0.3 ppt lift from the previous forecast.  

The hotel industry sold a record number of room nights in the first half of the year, an increase of 11.4 million compared with 2025, while room revenue climbed by more than $5.4 billion. The industry outperformed our expectations on stronger leisure and business travel, fueled in part by the World Cup and America 250 celebrations. In the next six months, we expect slightly lower gains than in the first half of the year, but top-line growth will still be driven by ADR. We also expect to see a stronger 2027 than what we initially projected in our past forecasts, although there will be some mid-year weakness due to difficult year-over-year comparisons. We expect travel activity to continue to grow as we move into next year. Stable labor markets, recent wealth gains, and easing inflation should keep consumer spending resilient, while business investment is broadening beyond AI-related projects and group travel continues to recover. International visitation should see modest improvement, though prolonged US-Canada trade tensions remain a headwind to watch

Amanda Hite, STR president

With stronger rooms revenue, GOPPAR is expected to rise 4% this year and another 1% next year,” said Hite. “Rising expenses continue to be worrisome, increasing by more than the rate of inflation in both 2026 and 2027.

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