NEW YORK — All things considered, U.S. hotel performance so far in 2026 is where many in the industry hoped it would be following a maligned previous year.
CoStar and Tourism Economics upgraded their full-year 2026 U.S. hotel forecast nearly across the board from its previous projections in the first quarter.
U.S. hotel revenue per available room is now forecast to grow 2.8% year over year, up from previous projections of 0.6% growth back in January. U.S. hotel average daily rate is forecast to grow 2% year over year, and occupancy is estimated to finish the year at 62.8%.
RevPAR is forecast to grow year over year across each hotel segment as well, with luxury continuing to lead the way.
"We're projecting that this year is actually very much a reversal from last year, and that room demand is going to continue to grow and that gives us some pricing power," Jan Freitag, national director of hospitality analytics at CoStar Group, said during the "State of the state: Macro, micro and trends" session at the NYU International Hospitality Investment Forum.
In 2025, annual U.S. hotel RevPAR and occupancy saw declines for the first time since 2020.
Michael Grove, CEO of Hotstats, said the U.S. hotel industry has already regained the RevPAR drop in 2025 through the first four months of 2026. A large part of that is attributed to RevPAR growth in ancillary revenue generators such as food and beverage; conference and events; spa and wellness; and golf.
Hoteliers "should be maximizing [ancillary services] in order to be able to offset these cost challenges that we're going to continue to see," Grove said.
Consumer spending among Americans continues to grow despite declining consumer sentiment, said Adam Sacks, president of Tourism Economics.
"Why? Well, I think fundamentally it's because the labor market is hanging in there pretty impressively," he said. "You have this resilient labor force that's underpinning people continuing to spend even though they're pretty unhappy about the situation."
The top income earners continue to spend on lodging. Households that earn $150,000 or more annually account for 51% of leisure travel spending on lodging while making up only 19% of households, Sacks said.
Luxury leads all hotel chain scales in projected RevPAR growth in 2026 at 5.3% after being the standout segment in 2025.
"We have seen almost no price resistance on the very high end," Freitag said. "Our forecast for RevPAR reflects that we haven't seen a trade down for middle-income America. We're projecting demand growth across the limited-service sector as well. So far, so good."
The U.S. also has a couple of major events this summer in the FIFA World Cup and America 250 celebrations.
Robert O'Leary, deputy assistant secretary for travel and tourism at the International Trade Administration, said these sports events are really travel events for the U.S. In addition to the mega sporting events this summer, the U.S. is set to host several more in the coming years, including the 2028 Los Angeles Olympics.
"There is a decade of big demand that's setting up for, and we think that demand is going to really put the United States and travel into the spotlight," O'Leary said.
Headwinds still abound
U.S. hotel performance has surged in 2026 in spite of numerous challenges affecting consumers and the economy.
Sacks said consumer sentiment reached the lowest mark in its 75-year recorded history in the month of April. The labor market remains resilient, but it's also hard to find a job for those who don't have one, and the unemployment rate is likely to rise as the year goes on. Plus, the price of gas has ballooned to more than $4.50 a gallon in the wake of the U.S.-Iran war in the Middle East.
"This is having a major impact on disposable income, particularly for those in the bottom half of income earners," Sacks said.
Stimulus tax refund checks were viewed as a major tailwind coming into the year, but the rise in energy and gas prices have largely offset that impact, he said.
Policies enacted by the Congressional Budget Office, particularly the "One Big Beautiful Bill Act," have favored the top 20% of income earners. The top 1% of income earners doubled their net worth as a share of disposable income, while those in the bottom 20% saw their net worth shrink following the passage of the bill.
"When you look at the fiscal package and its net effect on households, strongly positive for really anyone in the 40th percentile up," Sacks said. "Even with the drag of tariffs, you're seeing a positive effect on overall disposable, real income, and it, of course, favors these higher-income households."
While the World Cup will certainly have an effect on hotel demand in the tournament's host markets, the velocity of bookings has come in lower than initially anticipated. Brett Horton, chief advocacy officer at the American Hotel Lodging Association, said AHLA is taking a look at why demand is coming in lower so the U.S. can be better prepared for future events.
"There were state and local policies that may discourage visitors, or certainly the geopolitical considerations. There's perceptions of visa barriers ... those are all things that could possibly be driving down the pace of bookings," he said. "But there's still an opportunity, and our hoteliers are prepared for getting last-minute travel that picks up, and we see this as a real opportunity."
International inbound demand continues to fall, Sacks said. Overseas travel to the U.S. is down 4.3% so far in 2026 after falling 2.5% last year.
Canadians continue to stay away from the States. Canadian travel fell 25% last year and has fallen an additional 11% in the first four months of 2026, Sacks said.
This is a "strong reaction to policy and rhetoric that is seen as combative and unnecessarily creating division," he said. "People who can travel anywhere in the world are choosing, by and large, not to travel to the U.S."