NASHVILLE, Tennessee — Despite an extended period of stubborn U.S. inflation, consumers and travelers haven't yet recoiled from higher prices, and that's a good sign for hotel forecasting for 2027.
A major positive is that U.S. salary growth continues to outperform inflation, said Jake Bruno, senior forecasting analyst at STR, CoStar's hospitality analytics firm. That's a good sign for consumers and for hotel demand stability across the country.
“Households continue to move up the combined salary ladder. … U.S. households continue to be better off,” Bruno said during a presentation at the 18th Hotel Data Conference.
The portion of U.S. households that have a combined income of $200,000 or more is growing, and that bracket constitutes 25% of U.S. travel spend, Bruno said.
On the other side of the equation, credit-card delinquency is up year over year, which normally has a negative effect on low-end hotel demand.
“A 1% increase in 90-day credit-card delinquency equals a 40-basis-point decline in economy hotels overall,” he said.
But the rise or fall of U.S. gross domestic product has a sizable impact on U.S. hotel performance. STR and Tourism Economics predict 2026 GDP to end the year up 2.3%, while in 2027, GDP is forecast to rise 2.7%. Meanwhile, U.S. inflation is likely to move in the opposite direction from a full-year rate of 3.2% in 2026 to up 2.4% in 2027.
What's also helping U.S. hotel performance is group and corporate bookings are more predictable than transient demand, and these demand drivers are back, Bruno said.
That is more than can be said for international inbound demand, which “is messy, regional and uncertain,” he added.
“Where we have seen positive [international inbound] numbers, it is typically less than 1%. Inbound travelers disproportionately stay in upper-end hotels," Bruno said.
Supply dip and a tougher summer comparison
U.S. hotel construction continues to slow, and STR projects U.S. hotel supply to grow 0.4% year over year in 2026 and 0.6% in 2027. In fact, U.S. hotel construction is at its lowest volume in 12 years.
Year over year, San Francisco leads the way with hotel rooms in construction, but its growth comes from a low base stemming from its doldrums following the COVID-19 pandemic.
The majority of the top 25 U.S. hotel markets are outpacing inflation, but that is not indicative of the entire nation, Bruno said. Only 42% of all markets are doing the same, he added.
Again, group and corporate business are responsible for this healthier demand, but that rebound has only been around since February 2026. AI and data center activity are now major metrics movers, he said.
Overall, U.S. hotel average daily rate in 2027 is predicted to remain below the inflation rate and dampened by the metrics effects generated from the 2026 FIFA World Cup, Bruno said.
Luxury hotels should continue to thrive next year, but Bruno said the upscale segment is expected to have flat occupancy and consistent ADR.
“On a monthly breakdown, occupancy is expected to grow through 2027 because of reduced supply and more moderated demand. [The first quarter] is going to be strong, specifically on the rate side,” he said.
And next year will see calendar shifts of holidays and weekend days, with March performance likely to show differences in its 2027 year-over-year numbers.
“This is due to two reasons. First, we saw a bit of an overperformance outside of just the recovery [in 2026], and [in 2027] we are seeing Easter shift from April to March … which is going to affect business travel during that time,” he said. “Quarters two and three are heavily affected by the World Cup. June's forecasted U.S. topline revenue per available room [is down 0.8%]. During that time, occupancy is expected to grow but because the World Cup put such an emphasis on rate and was an ADR-driven event, there has to be some expectation of a pullback [in 2027], even though we expect actual natural structural growth on top of that."