CoStar, Tourism Economics Raise U.S. Hotel Growth Forecast

June 4, 2026

ARLINGTON, Va. — CoStar and Tourism Economics raised their 2026-27 U.S. hotel forecast, citing stronger demand from group and transient business.

For 2026, projected gains in average daily rate (ADR) and revenue per available room (RevPAR) were upgraded by 1.0 percentage point and 2.2 percentage points, respectively. Occupancy is now expected to grow for the year, after the previous forecast projected a year-over-year decline.

“The cautious optimism that framed our outlook earlier in the year has made way for a more robust forecast, driven by stronger demand from both the group and transient segments,” said Jan Freitag, national director of hospitality analytics at CoStar Group. “Since our last revision, the industry has seen sustained performance growth, with room demand up by more than 8 million room nights year over year through the first four months of 2026.

“For the remainder of the year, we expect a moderation in demand growth, but the pace will remain conducive for solid ADR and RevPAR gains, even though both will continue to incr ease below the rate of inflation.”

Aran Ryan, director of industry studies at Tourism Economics, said travel activity appears resilient heading into the summer.

“Travel activity appears resilient heading into the summer. Stable job markets and rising household wealth are supporting leisure travel demand despite higher fuel prices,” Ryan said. “Group travel is also improving alongside robust corporate profits, while international visitation remains weak with hopes of a World Cup bounce. Looking ahead, easing inflation should support a modestly stronger economy next year.”

Freitag said gross operating profit (GOP) is expected to rise as total revenue increases; the rooms department is providing the largest growth contribution. However, he said expenses are expected to rise at a higher rate, continuing pressure on profit margins.

“GOP is expected to rise on increasing total revenues, with the largest growth contribution coming from the rooms department,” Freitag said. “However, expenses are anticipated to grow at a higher rate, resulting in a continued squeeze in profit margin.”