CoStar and Tourism Economics Raise 2026 US Hotel RevPAR Forecast to 4.4%

CoStar and Tourism Economics have upgraded their 2026 U.S. hotel performance forecasts, raising expected revenue per available room (RevPAR) growth to 4.4 percent. Driven by record first-half room night sales and strong event-based demand, the revised outlook also anticipates higher average daily rates (ADR) and a slightly improved occupancy rate of 63.1 percent for the year.

What is driving the upgraded 2026 outlook?

The hotel industry sold a record number of room nights in the first half of the year, representing an increase of 11.4 million compared to 2025 [1]. Room revenue climbed by more than $5.4 billion during the same period [3]. According to Hotel Dive, STR President Amanda Hite stated the industry outperformed expectations due to stronger leisure and business travel, which was fueled in part by the 2026 FIFA World Cup and America 250 celebrations [3]. While gains are expected to be slightly lower in the second half of the year, top-line growth will continue to be driven by ADR [1]. The upgraded projections were announced at the 18th Annual Hotel Data Conference [1].

How do the revised 2026 and 2027 forecasts compare?

For the full year 2026, the updated forecast anticipates RevPAR to increase 4.4 percent year over year, which is a 1.6 percentage point upgrade from the previous 2.8 percent growth forecast [3]. ADR is now expected to increase 3.1 percent year over year, up from the previously projected 2 percent [3]. The occupancy outlook was raised by 0.3 percentage points to 63.1 percent [1]. For 2027, CoStar and Tourism Economics forecast that occupancy will reach 63.4 percent, with ADR increasing 1.6 percent and RevPAR growing by 2.1 percent for the full year [3].

What macroeconomic factors are influencing future performance?

Travel activity is expected to continue growing into next year due to stable labor markets, recent wealth gains, and easing inflation keeping consumer spending resilient [3]. Asian Hospitality reported that business investment is broadening beyond AI-related projects, and group travel continues to recover [1]. However, sources attribute these economic observations differently; Asian Hospitality attributes the statement to STR President Amanda Hite, while Hotel Dive attributes the exact same quote to Aran Ryan, director of industry studies with Tourism Economics [1][3]. Both sources agree that international visitation should see modest improvement, though prolonged U.S.-Canada trade tensions remain a headwind [1][3].

What challenges remain for hotel operators?

Despite the positive revenue outlook, rising expenses remain a primary concern for the industry. Hite noted that rising expenses are worrisome, as they are expected to increase by more than the rate of inflation in both 2026 and 2027 [1]. Hospitality professionals have cited rising operational expenses, including labor costs, as a top concern for 2026 [3]. Furthermore, while 2027 is anticipated to be stronger than initially projected, Hite warned of mid-year weakness due to difficult year-over-year comparisons [3]. On the profitability front, gross operating profit per available room (GOPPAR) is expected to rise 4 percent this year and another 1 percent next year on stronger rooms revenue [1].