As the U.S. hotel industry faces continued soft revenue per available room in 2026, Isaac Collazo, senior director of analytics at STR, said he's more optimistic for full-year performance, even though the industry faces a tough first half of the year.
When speaking about the new hotel performance forecast released by CoStar and Tourism Economics on Jan. 26 at the American Lodging Investment Conference, Collazo said, "the highlight is it's more of the same."
"Yes, we tweaked (the forecast) just a bit, but it's nothing that different from what we released a quarter ago. And it's because, again, economically, politically, nothing's changed," he said. "Why would you expect it to be different at this point?"
But travelers are getting used to these conditions, he said, and consumers still remain interested in travel, even if they are booking alternative accommodations to do so.
"If you add hotel demand and short-term rental demand (in 2025), total accommodation demand was up 6 million room nights, but all of that was short-term rentals, because room demand for hotels actually fell," he said. "So, that takeaway, for me is people have not lost the desire to travel, but because of the higher cost of living, people are making different choices. And I think that's a big insight that we have to really internalize as an industry."
Collazo said hoteliers face a mixed bag of both challenges and opportunities this year — from positive holiday and calendar shifts and the World Cup to hurricane market comparisons and continued consumer uncertainty. But he also points to key pipeline metrics for hoteliers to be aware of.
"What we're seeing right now is that only 19% of the hotels in the pipeline are actually under construction," he said. "What's significant about that? That's not an all-time low, but that's the lowest since 2011."
The U.S. is seeing about 750 hotel openings a year, which is well below the 20-year average, Collazo said, but conversions, which had been below the 20-year average, rose to the highest rate since 2016. Collazo said that he expects supply growth to remain under 1% until conditions — namely, construction costs — change.
With so much uncertainty still at play, he said he's keeping a close eye on the news for potential events that would affect the forecast.
"We're one tweet away from a disaster," Collazo said. "It's that one comment that could change everything for the economy, the politics, you name it. It's just a comment can actually move markets."