U.S. hotel performance started off strong in 2026 as revenue per available room increased by 7.9% in the week of Dec. 28 to Jan. 3. Hotel occupancy rose 2.1 percentage points and average daily rate jumped 3.4%. Room demand grew by 5.2%, largely driven by a 5.7% increase in transient demand.
Our initial projections anticipated a subdued holiday season due to the midweek timing of Christmas Eve and New Year’s Eve. While we accurately assessed the impact for Christmas, our expectations for the New Year period did not materialize.
Since 2000, New Year’s Eve has occurred on a Wednesday four times, including 2025. This time, occupancy reached 56.8%, which remains lower than figures typically seen when the holiday falls on a Friday or Saturday; however, room demand ranked ninth highest historically. Notably, RevPAR increased 3.4% driven by a 1.3-percentage-point rise in occupancy and a 1% increase in ADR.
Room demand growth was seen every day of the week, except Tuesday, last year’s New Year’s Eve. Overall, it rose by nearly 1 million room nights compared to the previous year, with an average daily gain exceeding 141,000 room nights. In total, 2.9 million hotel rooms were sold daily during the week — an average of 155,000 fewer per day relative to 2021 and 2022, when New Year’s Eve fell on Friday and Saturday, respectively, but much stronger than we anticipated. For the two weeks encompassing this holiday season, RevPAR advanced by 0.7% compared to the same period last year, with occupancy stable and ADR rising 0.8%.
Most US hotel markets share in RevPAR gains
RevPAR increases were seen in most hotel markets across the nation as 78% of them were up, including 21 of the top 25 markets. Of the 12 markets that saw RevPAR decrease by 10% or more, 10 were 2024 hurricane markets. Atlanta and Salt Lake City were the other two large decliners. Overall, RevPAR in hurricane markets was down 15.5% on falling occupancy.
Miami led the top 25 in hotel RevPAR growth for week with a 26.4% increase. Hotel occupancy in Miami reached 88% and ADR increased 17.1% to $383. This was the second-highest ADR in the country for the week, behind only Oahu Island in Hawaii. Miami hotels were the benefactor of heightened New Year’s Eve travel, plus the College Football Playoff Orange Bowl game played on New Year’s Day. This overlap drove occupancy to 93.5% and ADR to $455 on New Year’s Eve.
Six additional top 25 markets experienced double-digit RevPAR increases including Minneapolis, Dallas, Philadelphia, New York City, St. Louis and Orange County. Outside of Dallas, which hosted the CFP Cotton Bowl, these increases were mainly the product of increased New Year’s Eve demand. RevPAR in top 25 markets, excluding Las Vegas, was up 9.1% with ADR slightly outpacing occupancy growth.
Hotel RevPAR in Las Vegas was flat this week. This does not initially stand out as a national market driver, but it is important to understand the context of the recent results. Las Vegas is up for the first time in weekly RevPAR since early October, ending a 12-week negative streak RevPAR. Over that period, Las Vegas RevPAR decreased 12.5%, while the overall U.S. hotel RevPAR was down 1.3%. If you removed Las Vegas, U.S. RevPAR was somewhat flat (-0.6%) during that period.
RevPAR in non-top 25 markets saw growth of 10.9% with Buffalo (+66.4%) seeing the highest RevPAR gain of any market this week. Buffalo’s large gains began on Sunday when the Buffalo Bills hosted the Philadelphia Eagles, and the increases continued the rest of the week. Fort Worth/Arlington, Texas (+57.7%), and Montana (+52.2%) also saw strong RevPAR growth. In total, more than half of all non-top 25 markets saw double-digit RevPAR gains in the week versus 28% of the top 25 markets.
The nation’s highest hotel occupancy was seen in the Florida Keys (90.1%) where ADR increased by 16%. Miami had the second-highest occupancy (88%), followed by Fort Lauderdale and New York. All three markets also saw double-digit ADR increases with occupancy above 86%. Gatlinburg/Pigeon Forge, Tennessee, and Oahu were also strong with the measuring topping 85%.
Steady growth reported in nearly all hotel classes
Also notable during the week of Dec. 28 to Jan. 3 was the shared gain across most hotel types. Bifurcation continued with luxury hotels leading in RevPAR growth (+13.2%) and economy hotels bringing up the rear (-3.3%). However, the economy segment was not as bad as it seems. Excluding Hurricane markets, economy hotels saw RevPAR advance by 1.9%. Hurricane markets also affected hotels in midscale where the total result was up 2% with hurricane markets and up 6% without. The remaining classes saw RevPAR advance by 6% or more overall with slightly higher gains without hurricane markets.
RevPAR gain offers optimism, but sustained growth remains uncertain
While the RevPAR gain was welcomed and a positive sign for the U.S., it is worth noting that strong performance in the first week of the year doesn't always indicate growth for the rest of the year. For example, RevPAR rose by 15.3% during the first week last year, but after that, the industry only experienced double-digit RevPAR growth once more with declines in most of the following weeks. We do not anticipate a performance catalyst yet. RevPAR will likely stay negative in the first quarter of 2026, with gradual recovery expected as 2024 hurricane impacts diminish.
Global hotel RevPAR surges back
Global hotel RevPAR on a same-store basis excluding the U.S. surged back with RevPAR rising by 12.3%. Occupancy rose by 4 percentage points with ADR up 5.7%. China led the gain, up 23.8%, its largest RevPAR in some time due to an elongated New Year holiday – January 1-3, 2026 versus January 1, 2025. Hotel RevPAR was also strong in the Caribbean, Canada, France, Latin America, and Australia, where it rose by more than 11%.
Mexico saw the weakest RevPAR result at 1.6% growth, which was held back by lower-performing properties in the Mexican Caribbean (-6.5%) and Monterrey (-5.5%). Cancun also saw weak hotel performance results (+1%).
Isaac Collazo is senior director of analytics at STR. Cole Martin is an analytics and insights specialist at STR.
This article represents an interpretation of data collected by CoStar's hospitality analytics firm, STR. Please feel free to contact an editor with any questions or concerns.