After a strong start to 2026 in the first week of the new year, tough comparisons for hurricane-impacted markets pushed U.S. revenue per available room down 3.3% year over year in the week ending Jan. 10.
While that’s a noticeable decrease from last week’s 7.9% RevPAR increase, it is markedly better than the second week of 2025, which saw a 13.2% decrease on a year-over-year basis.
Falling occupancy — down 1.2 percentage points — drove the RevPAR decline with a 0.9% average daily rate decline also contributing. The top 25 and the 13 hurricane markets in 2024 were responsible for most of the occupancy loss, which was partially offset by gains in the remaining markets. Room demand fell by 310,000 room nights, mainly due to a roughly 260,000-room-night decline in group demand in the top 25 markets.
Taking a deeper look, RevPAR in the hurricane markets was down 25.5% with occupancy falling 10.9% and ADR down 9.2%. The top 25 markets, excluding Las Vegas and Tampa, which is also a hurricane market, had a RevPAR decrease of 4.1%. Seven of the 23 remaining markets saw double-digit decreases, the worst of which were San Diego’s 22.5% decline and Los Angeles’ drop of 19.6%. Some of the Los Angeles decline is due to last year’s wildfires, which resulted in displacement demand. However, that doesn’t appear to be the full explanation as this year’s demand decrease is more than three times larger.
Five of the remaining top 25 markets saw RevPAR surge led by St. Louis — up 34.9% — and followed by Minneapolis, Nashville, San Francisco and Phoenix, where the measure was up by more than 10% on strong demand growth. Minneapolis saw its largest demand surge come Sunday through Wednesday where it increased by an average of 3,800 room nights per day. Thereafter, the average moderated to 1,500 room nights per day. While Minneapolis’ demand growth was significant, Nashville saw the largest increase in room nights — up 29,000 — of any U.S. market this week with solid gains on every day except Tuesday and Wednesday.
RevPAR in the remaining markets was up only slightly — increasing 0.4% — as occupancy inched upward but was offset by sinking ADR. More than half of these markets reported increasing RevPAR with most seeing growth ahead of the inflation rate.
The growth in non-top 25 markets came from the weekend as RevPAR was down on all other days. Overall, Monday through Thursday RevPAR for the total U.S. fell 4.7%. On the weekend, however, RevPAR in the top 25 excluding Las Vegas and Tampa was up 0.4% and 3.3% in the remaining non-hurricane markets. Those markets in particular saw performance driven by occupancy growth. More than a third of the non-hurricane markets saw double-digit RevPAR growth during the weekend.
Performance by segment
This year's calendar matches those of 2009 and 2015, with holidays falling on the same days as in 2024. While 2009 is less comparable due to the Great Recession, 2015 serves as a reliable benchmark.
The big difference between 2015 and 2026 can be seen in upper-upscale and economy hotels. The latter were impacted by the 2024 hurricane markets, which accounted for 56% of the demand decline in economy hotels. Upper upscale is more interesting as its occupancy decrease was greater than that of economy, but that was also true in 2015 when demand grew in all classes except upper upscale.
The top 25 markets drove nearly all the decline in upper-upscale hotel demand for the week ending Jan. 10, with a sharper drop than in 2015. Los Angeles; Orlando; San Diego; and Washington, D.C., accounted for more than half of the decrease. In most markets, lower group demand was the main factor.
It should be noted that while occupancy was down in upper-midscale class hotels, the largest hotel class, demand was slightly up this week, adding roughly 35,000 room nights. That was the only class of hotels to see a demand increase for the week. This class also saw the largest gain in demand for the week prior.
All hotel classes were down in both RevPAR and occupancy, with economy and midscale hotels experiencing the largest declines in RevPAR.
International hotels outperform US
Global RevPAR excluding the U.S. and on a same-store basis increased 4.3% after surging in the prior week. China, Germany, India, Mexico and the U.K. all saw RevPAR retreat in the week after strong growth in the prior week. Other than Italy, all the remaining countries and regions saw RevPAR advance by more than 6% with most driven by ADR growth.
Canadian RevPAR increased by more than 7% on strong double-digit gains in Vancouver and Montreal. Toronto also saw RevPAR advance, but its growth rate was more moderate, up 2.3%, as occupancy saw a slight decline.
The last four weeks have seen a weekly whiplash in performance caused by holidays, conference shifts and more. Stability in performance isn't expected until the end of January given the difficult comps to the inauguration, Southern California wildfires and hurricane markets.