- Colliers projects U.S. lodging demand to rise 1.3 percent in 2026.
- Occupancy is projected at 64.1 percent in 2026.
- Growth is projected to return to trend by 2027.
THE U.S. HOSPITALITY sector is expected to recover in 2026, with lodging demand in the top 50 markets projected to increase 1.3 percent. That’s below the pre-pandemic average of 2 percent, according to Colliers.
Occupancy in the top 50 U.S. markets is forecast to remain at 64.1 percent in 2026, unchanged from 2025 and below the 2019 level of 69.5 percent, according to Colliers’ “2026 U.S. Hospitality Outlook Report.” The report projects occupancy to reach 65.3 percent by 2029, supported by slower hotel supply growth. Growth is expected to return to its historical trend by 2027.
The market remains segmented by income, the report said. Higher-income households support luxury and upper-upscale hotels, while middle-income travelers drive demand for midscale and economy accommodations.
International visitors fell 2.5 percent in 2025, with arrivals down 3.5 percent through April 2026. Political rhetoric on tariffs and immigration has contributed to the decline, particularly in border and coastal markets. Domestic air travel, however, has remained strong, with TSA throughput averaging 6.8 percent above 2019 levels in 2025 and continuing to rise in 2026.
ADR growth is projected at 1.35 percent in 2026 as travelers become more price-conscious, according to the report. The share of consumers prioritizing value for money rose from 83 percent in 2024 to 90 percent in 2025. In response, hotel operators are focusing on loyalty programs, bundled offerings and pricing strategies to maintain occupancy and market share. ADR growth is expected to improve after 2026 as demand stabilizes.
Markets such as New York City, Boston and Seattle may see higher ADR during the FIFA World Cup 2026, though occupancy gains are expected to be limited because the event falls during peak travel season, the study said.
Colliers reported that improved debt market liquidity and selective equity investment are supporting investment activity. Capital is increasingly flowing to high-quality assets and distressed properties as investors seek opportunities near cyclical turning points.
Investor sentiment is improving as delayed transactions return to the market. Cross-border investors are monitoring currency movements and pricing for reentry. AI is reshaping marketing, revenue management and operations, with adoption among Millennials and Gen Z rising from 10 percent in 2024 to 18 percent in 2025. Since early 2025, more than $1 billion in venture capital has been invested in hospitality technology, with 2026 investment on track to exceed prior years.
The U.S. hotel market is expected to grow in 2026, driven by value-focused consumer spending, segmented demand and technology adoption. While international travel and pricing remain challenges, conditions are expected to improve in the coming years.
Separately, a recent report by Access Hospitality found that U.S. hoteliers lose 42 days a year to disconnected systems as teams switch platforms, duplicate tasks and consolidate data manually. The result is more work across operations, reservations, guest communications, housekeeping, finance and reporting.
