U.S. Hotel Forecast Brightens as Americans Keep More Trips Close to Home

America’s hotel market is entering the second half of 2026 with a stronger outlook than expected, a shift that matters for travelers because it suggests fewer easy bargains in popular domestic markets, especially around major events, resort weekends and business-heavy midweek stays.

CoStar and Tourism Economics have upgraded their 2026 U.S. hotel forecast after the first four-plus months of the year outperformed earlier projections. The firms now expect U.S. revenue per available room, a key hotel-industry measure known as RevPAR, to rise 2.8% this year. Their previous outlook was much weaker, and the revision reflects stronger leisure demand, a recovery in group business and a calendar helped by sports, meetings and other events.

The change does not mean every traveler will pay more in every city. It does mean the U.S. hotel market is proving more resilient than many forecasters expected after a soft 2025, and that domestic travelers may need to plan more carefully in cities where rooms, flights and rental cars are all competing for the same summer and fall demand.

Why the forecast changed

CoStar reported that U.S. hotel RevPAR was up 4.0% year over year through April, and that the first quarter reached a record high for the metric. Demand has improved across more than one segment of the market: transient travel has strengthened, while group bookings for blocks of 10 or more rooms grew between February and April, helped by smaller and mid-sized events in secondary markets.

That matters because the hotel recovery is not being driven only by a few luxury resorts. Higher-end properties still have more pricing power, but the demand improvement is broader, including upscale, upper-midscale and midscale hotels. Travel Weekly reported that industry executives at the NYU International Hospitality Investment Forum pointed to a notable shift in Americans choosing trips closer to home, with some international travel redirecting into domestic destinations.

U.S. Travel Association’s spring forecast supports the broader domestic story. It projects total U.S. travel spending of $1.37 trillion in 2026, with domestic travel accounting for 87% of the total. Domestic leisure spending is expected to keep expanding, though inflation and household budget pressure are pushing some travelers toward shorter trips, regional getaways and drive markets.

What this means for U.S. travelers

For consumers, the practical message is simple: a stronger hotel forecast reduces the chance of widespread last-minute discounts in the most desirable domestic markets. Travelers may still find deals, particularly in cities with softer international demand or outside peak event nights, but the market is no longer behaving like one where hotels need to cut broadly just to fill rooms.

The biggest pressure points are likely to be familiar: weekends in resort and leisure markets, midweek nights in cities with returning business travel, and event periods in markets tied to concerts, sports tournaments, conventions and America 250 celebrations. The FIFA World Cup is also expected to help some host markets, although the effect is uneven and more dependent on match location, team draw and traveler mix than early hype suggested.

For families and leisure travelers, the stronger domestic trend makes total trip cost more important than the room rate alone. A cheaper hotel can lose its advantage if it requires a longer drive, a more expensive rental car, paid parking or a less convenient airport. Travelers comparing major gateways can use Odyssey’s airport guides for Orlando International Airport, Las Vegas Harry Reid International Airport, Los Angeles International Airport, Dallas/Fort Worth International Airport and San Francisco International Airport to weigh flight options alongside hotel plans.

Rental cars and regional trips deserve an earlier look

Because more domestic demand is shifting into regional and drive-oriented travel, ground transportation can become a hidden swing factor. In destination cities where travelers are spreading beyond the central hotel zone, rental cars may be part of the real cost of the trip. That is especially true for theme-park vacations, national park gateways, beach regions and suburban event venues.

Travelers booking summer or early-fall trips should compare airport pickup costs before locking in lodging. Odyssey has confirmed airport car-rental guides for several high-volume leisure and event gateways, including MCO car rentals, LAS car rentals, LAX car rentals, DFW car rentals and SFO car rentals.

A stronger market, but not a risk-free one

The upgraded hotel outlook still comes with caveats. CoStar and Tourism Economics pointed to macroeconomic uncertainty, geopolitical instability and uneven international inbound recovery as continuing risks. U.S. Travel also notes that inbound international travel remains below its 2019 level on an inflation-adjusted spending basis, even as large events are expected to help.

That unevenness is important. Some cities may see strong hotel demand because Americans are traveling domestically and events are filling rooms. Other markets may still feel the drag from weaker international sentiment, high airfares or travelers shortening stays to manage costs. In other words, the national forecast is stronger, but the traveler experience will remain highly local.

For U.S. travelers, the best response is not panic booking. It is earlier comparison shopping. Check the hotel rate against flight timing, airport choice, rental car cost, parking, resort fees and event calendars. In a market where domestic demand is holding up better than expected, the best value may come less from waiting for a last-minute room discount and more from choosing the right airport, neighborhood and travel dates before the most convenient options disappear.