In Brief: CoStar and Tourism Economics raised their 2026 and 2027 U.S. hotel outlook after stronger-than-expected room demand and revenue in the first half of the year, although rising operating costs and potential international travel pressures remain concerns.
CoStar and Tourism Economics made significant upward revisions to their 2026–27 U.S. hotel outlook, released at the 18th Annual Hotel Data Conference.
For 2026, the forecast now calls for demand growth of 1.7%, comfortably outpacing a 0.4% increase in supply. That would lift occupancy to 63.1%, up from 62.3% in 2025. Average daily rate (ADR) is projected to rise 3.1%, while revenue per available room (RevPAR) is expected to grow 4.4%. Compared with the previous forecast, the ADR and RevPAR projections were raised by 1.1 and 1.6 percentage points, respectively, and the occupancy forecast was lifted by 0.3 percentage points.
“The hotel industry sold a record number of room nights in the first half of the year, an increase of 11.4 million compared with 2025, while room revenue climbed by more than $5.4 billion,” said Amanda Hite, STR president. She attributed the stronger-than-expected performance to leisure and business travel, supported in part by the World Cup and America 250 celebrations.
Growth is expected to moderate in 2027 but remain positive. Demand is forecast to increase 1.1%, compared with supply growth of 0.6%, pushing occupancy to 63.4%. ADR is projected to rise 1.6% and RevPAR 2.1%.
Tourism Economics expects travel activity to continue expanding as stable labor markets, recent wealth gains and easing inflation support consumer spending. Broader business investment and the continued recovery in group travel should provide additional momentum. International visitation is also expected to improve modestly, although prolonged U.S.–Canada trade tensions remain a notable risk.
The improved top-line outlook should translate into stronger profitability. Gross operating profit is projected to rise approximately 4% in 2026 and 1% in 2027, following a decline of roughly 1% in 2025. Nominal gross operating profit per available room (GOPPAR) has moved above its 2019 benchmark and is expected to climb further through 2027. Inflation-adjusted GOPPAR, however, remains well below its pre-pandemic level and is forecast to soften slightly—highlighting the ongoing pressure from expenses rising faster than inflation.
