- CoStar, TE raise 2026 occupancy, ADR and RevPAR forecast by 0.1 points.
- Supply growth was cut 0.2 points and demand fell 0.1 points.
- Growth rates are projected to rise in 2027.
COSTAR AND TOURISM Economics raised their 2026 occupancy, ADR and RevPAR forecast by 0.1 percentage points. However, supply growth was cut 0.2 points and demand fell 0.1 points.
Growth rates are projected to increase in 2027, but the forecasted 1.4 percent RevPAR gain remains below the 3 percent long-term average, the research agencies said in a statement.
“We expect top-line performance to strengthen in the second half of the year, although growth will remain moderate and concentrated among higher-tier hotels,” said Amanda Hite, STR president. “The early months of that period will feature gains in World Cup host markets and surrounding areas. In addition, calendar shifts will provide a lift as we move past elevated comparables from 2024 hurricane-affected markets.”
Aran Ryan, TE director of industry studies, said they expect a more supportive environment for U.S. travel in 2026.
“While a softer job market weighs on younger and lower-wage households, real wage gains and household wealth should support consumer spending,” he said. “Business investment will broaden beyond AI as borrowing costs ease and tax incentives support new projects. International travel faces near-term headwinds but is likely to rebound as global demand strengthens and the World Cup boosts summer arrivals.”
“Total revenues are expected to rise faster than last year, while expenses should follow a similar path, though at a slower pace than in 2025,” Hite said. “Even so, expense growth will continue to outpace inflation.”
In November, CoStar and TE downgraded the 2025 U.S. hotel forecast, with occupancy down 0.2 points to 62.3 percent, ADR at 0.8 percent and RevPAR cut 0.3 points to -0.4 percent.
