2026 HVS Lodging Tax Report - USA

This 16th annual Lodging Tax Study presents data on city, state, and special district lodging and sales taxes imposed on lodging sales. We provide historical data on tax rates and collection and distribution of revenue from lodging taxes levied in all 50 States and the 150 largest US cities. Our analysis of 25 major U.S. hotel markets shows more markets declining than growing in 2025. Through August 2026, RevPAR rose in all but one market, signaling broad-based improvement in hotel performance.

Lodging Industry Overview

Since room sales generate lodging tax revenues, an overview of hotel market trends provides insight into the industry’s current and future fiscal impacts. As documented in our 2025 HVS Lodging Tax Study, the national lodging market has experienced recent growth in average daily room rates and revenue per available room. However, occupancy levels have remained relatively flat. The Average Daily Room Rate (“ADR”) represents the average revenue earned for each room rented in a hotel. Revenue per available room (“RevPAR”), the product of ADR and occupancy rate, is a standard industry metric that combines the effects of occupancy and room rates on overall revenue performance. ADR and RevPAR increased in 2024, while RevPAR declined slightly in 2025 as occupancy fell. Through the first eight months of 2026, all three metrics have improved compared to the same period in 2025. The figure below compares year-over-year growth in occupancy, ADR, and RevPAR for the entire U.S. lodging market, based on CoStar data, from 2024 through August 2026.

Occupancy declined in 2025 compared to 2024, with ADR growth also slowing due to reduced leisure travel and greater consumer price sensitivity, resulting in a slight decline in RevPAR. Year-to-date 2026 data through August shows a rebound, with occupancy up approximately 1.4% and ADR up approximately 3.4%, driving RevPAR growth of nearly 5%. The following figure shows the year-over-year change in room revenue for the top 25 major U.S. markets as measured by city population. We compared 2024, 2025, and year-to-date 2026 rates of change in room revenue.

Room revenue performance diverged sharply across the top 25 U.S. markets from 2024 to 2025. Ten markets posted gains, Philadelphia was flat, and the remaining 14 markets recorded declines. San Francisco led all markets with a 14.5% increase in room revenue, well ahead of New York City (6.8%), Oklahoma City (6.4%), and Columbus (5.8%). At the other end of the range, Las Vegas (-10.4%), Houston (-8.7%), and El Paso (-7.3%) saw the steepest declines. With more than half of the top 25 markets reporting lower room revenue, these results point to a softening of the revenue base on which lodging taxes are levied, and lodging tax collections in many major markets are likely to flatten or decline in the near term.

Hotel room revenue is the base on which most lodging taxes are levied, so the size of each market's room revenue, along with its tax rate, determines the scale of its lodging tax collections. CoStar reports room revenue net of taxes, so the figures below reflect pre-tax room sales and exclude the lodging taxes collected on them. Short-term rentals also generate lodging taxes in nearly all jurisdictions, but this impact is not captured in the CoStar data.

The following figure shows 2025 room revenue for the top 25 U.S. lodging markets.

The top 25 markets generated approximately $54.0 billion in room revenue in 2025, but that revenue is highly concentrated. New York City and Las Vegas stand well apart from the rest, together accounting for more than 40% of the total, and New York City alone generated more than four times the revenue of Chicago, which ranks third in room revenue. Most of the remaining markets fall within a narrower band of $1 billion to $3 billion, while the nine markets below $1 billion together contribute only about a tenth of the total.

While room revenue reflects the overall size of a market, RevPAR measures how much revenue each available hotel room generates, combining occupancy and average daily rate into a single measure of performance. Comparing RevPAR across markets shows which destinations earn the most from each room, regardless of how many rooms they have. The following figure shows 2025 RevPAR for the top 25 U.S. lodging markets.

RevPAR varied widely in 2025, with New York City and Boston leading at more than $200 per available room, about four times the level in Oklahoma City. RevPAR rankings often differ from room revenue rankings. Las Vegas and Houston rank among the top ten in room revenue but lower in RevPAR, reflecting the scale of their markets rather than performance per room. Boston shows the opposite, ranking second in RevPAR but seventh in room revenue. These differences show that high-performing markets such as Boston generate strong lodging tax collections from each room, while high-volume markets such as Las Vegas and Houston produce large collections through the sheer size of their hotel markets.

While the previous figures reflect full-year 2025 performance, 2026 year-to-date data provides an indication of where the lodging tax base is heading. The following figure shows the year-to-date percent change in RevPAR for the top 25 U.S. lodging markets in 2026 compared with 2025.

Hotel performance has strengthened broadly in the first eight months of 2026. Combined year-to-date room revenue across the 25 markets rose 7.8% compared with the same period in 2025, to approximately $37.3 billion, and RevPAR increased in all but one market. San Francisco and San Jose led with gains of 21.5% and 18.0%, lifted by AI and technology conventions, along with Super Bowl LX and the FIFA World Cup in Santa Clara. Austin was the only market to decline, largely due to the closure of its convention center for redevelopment, which removed the hotel demand generated by citywide conventions. New York City and Las Vegas, the two largest revenue markets, experienced more moderate growth. Overall, broad-based RevPAR growth points to a recovering lodging tax base after a softer 2025, although modest gains in several large markets may slow the recovery in total collections.

Many of these markets hosted 2026 FIFA World Cup matches, which likely contributed to the widespread RevPAR growth through August 2026.^[1] The following figure shows the estimated rooms revenue impact in each U.S. host market.

The 2026 FIFA World Cup generated a substantial impact on hotel performance across its eleven U.S. host markets, producing an estimated $680 million in incremental rooms revenue overall. New York captured by far the largest share at $339.2 million, or $42.4 million per match. On a per-match basis, Boston ranked second at $9.9 million, slightly ahead of Los Angeles. Kansas City's performance was also notable relative to its market size, out-earning larger markets such as Houston and San Francisco on both a total and per-match basis. Because no event of comparable scale is scheduled for 2027, these markets will be measured against an elevated 2026 base. As a result, growth in lodging tax collections may fall below historical trends in 2027.

Economic Uncertainty

This report was prepared during a period of significant uncertainty, marked by multiple changes in U.S. policies that have impacted both the domestic and global economies. Any subsequent change to these perspectives or information could affect the future growth of lodging tax revenues.

Throughout 2025 and into 2026, shifting trade policy and litigation over the legality of the administration's tariffs created widespread uncertainty surrounding how the U.S. and global economies may respond.^[2] Since late February 2026, the conflict with Iran has pushed energy prices higher, adding to inflationary pressure and prompting the Federal Reserve to raise interest rates. Areas of concern include rising energy and borrowing costs, which, combined with inflation, would further increase the cost of doing business and continue to impact the pipeline for new development. Tighter household budgets could also affect domestic travel, including both transient and group activity. In addition, the U.S. government’s immigration and visa policies may result in a shortage of hospitality workers.

Geopolitical concerns have influenced global travel to the US. Tourism Economics estimates that international overnight visits to the U.S. fell 5.7% in 2025, driven largely by a 25.7% decline in visits from Canada, and expects ongoing policy uncertainty to limit the recovery in 2026.^[3]

Until more clarity emerges, the near-term outlook remains uncertain due to the factors mentioned above. Persistent inflation, higher interest rates, and weakening consumer confidence remain key concerns. Over the long term, the hospitality industry has proven to be extraordinarily resilient following past “shock” events and downturns such as 9/11, the Great Recession, and the COVID-19 pandemic. Despite temporary declines, the industry’s performance has consistently recovered and continued to grow. Thus, we are confident the industry will prove to be similarly resilient following the current period of uncertainty.

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