CoStar holds 2026 U.S. hotel outlook largely unchanged

Moderate growth expected as economic conditions stabilize and demand shifts to higher-tier hotels

CoStar and Tourism Economics have maintained a largely steady forecast for U.S. hotel performance in 2026, citing a more supportive economic backdrop. While projections for occupancy, ADR, and RevPAR were slightly revised upward, overall growth expectations remain modest. The outlook suggests stronger performance in the second half of the year, driven primarily by higher-tier hotels and major events such as the FIFA World Cup. Longer-term, early projections for 2027 point to continued, incremental improvement rather than a sharp acceleration.

Key takeaways

• Forecast stability: CoStar and Tourism Economics made only marginal upward revisions to their 2026 outlook, signaling confidence in a steady but unspectacular recovery trajectory.
• Incremental performance gains: Occupancy is now projected at 62.1%, with ADR up 1% year over year and RevPAR rising 0.6%, reflecting limited pricing power and cautious demand growth.
• Second-half momentum: Performance is expected to strengthen later in 2026, though gains are likely to remain uneven across segments and markets.
• Higher-tier hotel advantage: Growth is expected to be concentrated among upper-tier properties, suggesting continued pressure on midscale and economy segments.
• Event-driven uplift: The FIFA World Cup is expected to deliver localized demand boosts in host cities, particularly during the summer period.
• Improving economic backdrop: Real wage gains, easing borrowing costs, and broader business investment beyond AI are seen as supportive factors for domestic travel.
• International travel recovery: While facing near-term headwinds, international travel is expected to rebound gradually as global demand improves.
• Cautious 2027 outlook: Early projections for 2027 indicate slightly stronger ADR and RevPAR growth, but only marginal occupancy gains, reinforcing expectations of gradual normalization rather than rapid expansion.

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