- RevPAR is projected to grow 0.9 percent in 2026, with occupancy at 62 percent.
- RevPAR will face headwinds early in 2026, followed by growth in the second half.
- AI is reshaping how travelers book hotels and how operators manage performance.
THE U.S. LODGING industry is recalibrating, with RevPAR growth of 0.9 percent projected for 2026, according to PricewaterhouseCoopers. Average occupancy is expected to reach 62 percent, though inflation, supply growth and AI-driven changes in travel behavior and hotel operations continue to pose challenges.
PWC’s “US Hospitality Directions” report found the industry is entering a more familiar landscape following post-pandemic recalibration. Growth is slowing, demand remains inconsistent and the cost of capital, though down from recent highs, remains elevated. Some predictability is returning, including in group travel, but it is modest and unevenly distributed.
“Even as RevPAR bifurcation persists, supply growth is expected to normalize across chain scales after several years of constraint,” said Abhi Jain, PwC US principal for hospitality and real estate. “At the same time, AI’s accelerating influence is reshaping how hotels operate, compete, and connect with travelers.”
While not a rebound, PwC’s 2026 forecast points to normalization, supported by a stable macro environment, easier year-over-year comparisons, particularly in the second half of the year and national events. Margin pressure is expected to increase as supply outpaces demand and inflation weighs on flow-through, leaving operators and owners with less cushion and higher risk.
PwC expects RevPAR headwinds in the first two quarters of 2026, followed by sequential growth in the second half as large events and macro stability support business and inbound travel.
Shifting demand patterns
Leisure travel is increasing and concentrating in warmer and secondary markets, driven by U.S. events and wellness travel, the report said. Corporate travel, group bookings and inbound international travel have been slower to rebound.
Growth is expected to remain uneven, favoring metropolitan markets and certain chain scales, continuing a trend from the past 18 months. Higher-priced hotels are expected to outperform, supported by spending among higher-income households, group travel demand, particularly in the second half of 2026 and supply growth.
Lower-priced hotels are likely to face RevPAR headwinds from inflation affecting lower-income households and limited exposure to group and meeting demand.
The AI shift
Artificial intelligence is changing how travelers discover and book hotels and how owners and operators manage performance, PwC said. AI-powered assistants are surfacing options earlier in the planning process, bypassing traditional brand touchpoints.
These shifts, tied to agentic commerce, are already affecting early trip planning. As large language models influence destination choices, they can narrow booking funnels before travelers reach brand-owned platforms.
PwC’s “U.S. Deals 2026 Outlook” found that the hospitality industry has shifted from expansion to optimization after several years of post-pandemic normalization. Deal activity remains steady but selective, with strategic buyers driving most transactions.
