CoStar, Tourism Economics Upgrade Hotel Sector Forecast

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CoStar and Tourism Economics upgraded their 2026-2027 U.S. hotel sector forecast–slightly.

For 2026, the research firms increased their occupancy, average daily rate and revenue per available room forecast by 0.1 percentage points from the previous forecast in November 2025.

But the firms lowered their hotel supply growth forecast 0.2 percentage points to 0.7% for the year and lowered their demand forecast 0.1 percentage points to 0.4% for full-year 2026.

“We expect top-line performance to strengthen in the second half of the year [2026], although growth will remain moderate and concentrated among higher-tier hotels,” STR President Amanda Hite said.

Hite added that the early months of that period will be highlighted by notable gains in World Cup host markets and their surrounding areas. “In addition, calendar shifts will provide a lift, especially as we move past the elevated comparables from the 2024 hurricane-affected markets,” she said.

“Total revenues are expected to rise at a faster pace than last year, while expenses should follow a similar trajectory—though at a slower rate of growth than in 2025,” said Hite. “Even so, expense growth will continue to outpace inflation.”

Growth rates are projected to rise further in 2027, but even the forecasted 1.4% increase in RevPAR would remain well below the long-term average of 3.0%.

“We expect a more supportive backdrop for U.S. travel in 2026,” added Aran Ryan, director of industry studies with Tourism Economics. “While a softer job market weighs on younger and lower-wage households, real wage gains and household wealth should keep consumer spending resilient.”