U.S. hoteliers remain optimistic despite weak consumer sentiment

Strong travel demand and limited new hotel supply are helping offset economic uncertainty and cost pressures

Consumer sentiment in the United States has fallen to near-record lows, driven by inflation and higher everyday costs. Yet hotel executives, investors, and industry analysts gathered at the NYU International Hospitality Industry Investment Forum remain notably optimistic about the outlook for travel and hospitality. Industry forecasts for 2026 have been revised upward, supported by resilient travel demand, limited new hotel supply, and continued spending by both affluent and increasingly middle-income travelers. While profitability challenges and geopolitical risks remain, many industry leaders believe the sector's underlying fundamentals remain strong.

Key takeaways

• Travel demand remains resilient: Despite weak consumer confidence, travelers continue to spend on trips, creating a disconnect between how consumers feel about the economy and how they actually spend.
• Hotel forecasts improve: CoStar increased its 2026 outlook and now expects U.S. RevPAR growth of 2.8%, supported by both room rate increases and healthy demand levels.
• Limited supply supports performance: High construction costs and elevated interest rates continue to restrict new hotel development, helping demand outpace supply growth.
• Luxury hotels continue to outperform: Affluent travelers remain willing to spend on premium travel experiences, with luxury hotel RevPAR forecast to grow more than 5% in 2026.
• Midscale demand is returning: Analysts and hotel CEOs reported stronger demand growth across middle-market hotel segments, reversing trends seen in the previous year.
• Profitability remains under pressure: Hotel owners continue to face rising operating costs, although stronger spending on food and beverage, wellness, events, and ancillary services is helping improve margins.
• Investors remain bullish on hospitality: Large-scale mergers, acquisitions, and continued capital investment suggest strong confidence in the long-term growth prospects of travel and hospitality.
• AI is reshaping hotel operations: Executives expect artificial intelligence to automate many administrative functions, reducing costs while allowing employees to focus more on guest-facing interactions.

Source: Hotels

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