CoStar and Tourism Economics raised their 2026 U.S. hotel forecast for the second time this year, projecting RevPAR growth of 2.8% and average daily rates up 2% nationwide, according to the firms’ own August 2026 release. Occupancy is now expected to reach 63.1%, a slight bump from the prior forecast, while gross operating profit per available room is projected to climb 4% this year before slowing to 1% in 2027. The upgrade follows a stronger-than-expected first half: U.S. hotels sold 11.4 million more room nights between January and June than over the same stretch in 2025, generating more than $5.4 billion in additional room revenue.
Why the forecast moved up
STR president Amanda Hite said in the companies’ own release that the industry “outperformed our expectations on stronger leisure and business travel,” adding that “top-line growth will still be driven by ADR” for the rest of 2026. The revised numbers reflect real demand rather than a modeling adjustment: RevPAR climbed 4% year over year from January through April, and multiple months this year set record highs for the industry, according to Hotel Dive’s coverage of the update.
Big events get part of the credit. The FIFA World Cup and America’s 250th anniversary celebrations both fell in 2026, pulling travelers into host cities on top of ordinary leisure and business demand. Aran Ryan, director at Tourism Economics, pointed to broader economic tailwinds in the same release: “Stable labor markets, recent wealth gains, and easing inflation should keep consumer spending resilient.”
Where the growth is concentrated
Not every hotel segment is benefiting equally. The luxury tier is expected to see the strongest RevPAR growth of any category in 2026, projected at 5.3% year over year, well ahead of the industry-wide 2.8% figure. That’s consistent with a broader pattern this cycle: higher-income travelers have kept spending on premium trips even as some mid-tier and budget segments have been more price-sensitive.
International inbound travel to the U.S. is also expected to grow 3.4% year over year, adding to domestic demand pressure on room rates in major gateway cities. Outbound travel from the U.S., by contrast, was revised downward, from 4.6% growth to 3.8%, suggesting more Americans are staying closer to home this year rather than traveling internationally.
The catch: rates are rising alongside costs
A stronger topline forecast isn’t purely good news for the industry, and it isn’t necessarily good news for travelers either. CoStar and Tourism Economics flagged that hotel operating expenses are rising faster than inflation in both 2026 and 2027, which pressures hotels to keep pushing rates higher just to protect margins rather than pad them. That dynamic tends to show up directly in what guests pay at checkout.
The forecast isn’t without risk factors. The firms cited geopolitical uncertainty, including fallout from an extended conflict involving Iran, and a softening labor market as reasons the outlook “remains complex” despite the upward revision. Those are the kinds of variables that could pull growth back down before the year is out.
What it means for booking your next trip
For travelers, the practical takeaway is that room rates are trending in one direction: up. With ADR growth outpacing occupancy growth industry-wide, hotels are making more of their gains by charging more per room rather than filling more rooms, a pattern that tends to hit last-minute bookers hardest. Locking in rates further ahead of a trip, particularly for fall travel and the holiday season, is a more defensible strategy in a market where the forecast keeps getting revised upward rather than down.
Luxury and upper-upscale travelers should expect the steepest increases, given that segment’s outsized projected growth. Budget-conscious travelers have more room to work with, but even there, rising costs across the industry make it less likely that discounting becomes the norm heading into the last quarter of the year.
Fall and holiday travel are the specific windows worth watching most closely. Hotels typically set their year-end rate strategy around what actually happened in the summer travel season, and a first half this strong gives operators little incentive to hold rates flat for Thanksgiving and Christmas bookings. Travelers who normally wait until a few weeks out to book holiday hotel stays may find that habit costs more this year than it has in past cycles.
Two forecast upgrades in one year is not a coincidence. It’s an industry that keeps outperforming its own predictions, with travelers footing higher bills the ones absorbing the difference.
