U.S. Hotel Forecast Upgrade Shows Summer Travel Demand Is Stronger Than Expected

U.S. hotel demand is entering the heart of summer on firmer footing than expected, with CoStar and Tourism Economics upgrading their 2026 revenue outlook after stronger-than-forecast performance through April. For American travelers, travel advisors and package sellers, the message is clear: the summer market is not simply recovering. It is becoming more selective, more event-driven and more dependent on domestic demand.

The June 1 hotel forecast update raised the expected 2026 U.S. revenue per available room, or RevPAR, growth rate to 2.8%, a significant improvement from earlier projections. CoStar said U.S. RevPAR was up 4.0% year over year through April and that first-quarter RevPAR reached a record high. The upgrade matters because hotels sit at the center of most leisure and event itineraries: when room demand strengthens, travelers often feel the effect in prices, availability, cancellation terms and the need to plan ground transportation earlier.

Why the forecast changed

The new outlook is not based on one single travel boom. Instead, it reflects several forces moving at the same time. CoStar and Tourism Economics pointed to strong leisure demand, a continued recovery in business travel, a better group-travel calendar and stronger performance on shoulder days such as Sundays and Thursdays. That combination suggests more travelers are building trips around long weekends, conferences, concerts, sports and midweek flexibility rather than relying only on the traditional Friday-to-Sunday leisure pattern.

Hotel demand has increased 2.0% year over year since the start of 2026, according to the forecast. Group demand, defined as bookings of 10 or more room nights, improved 2.7% between February and April, with secondary markets benefiting from smaller and mid-sized events booked closer to arrival. That is an important shift for the U.S. travel market because it spreads demand beyond the largest coastal gateways and into cities where hotel inventory, airport capacity and local transportation can tighten quickly during event weeks.

Higher-end hotels are still carrying much of the pricing power

The forecast also confirms a split that travelers have been feeling for several seasons: demand is broadening, but pricing strength remains concentrated in the upper tiers of the market. CoStar said luxury average daily rate was running just below 6% growth year to date through April, while select-service hotels were closer to 2%, below the pace of inflation. Lower-end hotels have seen some demand improvement, but rate weakness continues because their customer base is more exposed to household cost pressure.

For travelers, that means the best value may not always be the cheapest room category. In high-demand cities, especially around major sports or entertainment dates, midscale and select-service hotels can sell out or reprice quickly while upscale properties protect rates. Families and groups may need to compare total trip cost, including parking, transfers, resort fees and distance from the airport or venue, rather than looking only at the nightly room rate.

World Cup demand is real, but uneven

The FIFA World Cup remains one of the biggest variables in the summer outlook. CoStar and Tourism Economics said expectations are moderately optimistic, with markets including Dallas, Los Angeles and San Francisco showing stronger occupancy on the books than last year. The benefit is expected to come more through room rates than broad occupancy surges, especially in upper-end properties and around matches with high international fan interest.

That more cautious view lines up with the American Hotel & Lodging Association's May outlook, which warned that more than five million tickets sold had not yet translated into uniformly strong hotel bookings. The result is a market with sharp local peaks rather than a single nationwide hotel surge. A match weekend in Los Angeles, Dallas, New York/New Jersey, Seattle, Philadelphia or Houston can look very different from a normal summer weekend, while nearby non-host markets may remain more price-sensitive.

Travelers using major World Cup gateways should treat hotels and ground transportation as one planning decision. In Los Angeles, for example, travelers arriving through LAX may want to compare LAX airport transfers and taxis with LAX car rental options before hotel rates and match-day traffic narrow the practical choices. In North Texas, the same logic applies for fans and groups using DFW airport transfers or DFW car rentals.

Domestic travelers are becoming the stabilizing force

The U.S. market is also getting support from Americans who are staying closer to home. CoStar and Tourism Economics downgraded their 2026 U.S. outbound travel growth forecast from 4.6% to 3.8%, saying more travelers are remaining stateside. That shift helps explain stronger domestic demand for middle- and upper-end hotels and resilient performance in resort markets.

U.S. Travel Association data supports the broader pattern. Its spring 2026 forecast projects total inflation-adjusted travel spending growth of 1% this year, with domestic travel accounting for 87% of total spending. Domestic leisure travel is expected to rise 0.9% to $909 billion, while travelers respond to costs by favoring shorter trips, lower-cost options and regional drive markets. In other words, Americans are still traveling, but many are choosing trips with more control over time, budget and logistics.

Fresh agency data also points to stronger domestic planning. Fora reported on June 1 that summer bookings from its advisors were coming in at nearly double last summer's pace, with domestic and international trips both growing year over year. Its domestic list was led by New York, Florida, California, Texas and Hawaii, while New York City, Las Vegas and Chicago ranked as the most-booked U.S. cities in its dataset. Several Midwest and New England destinations also showed strong gains, reinforcing the idea that demand is spreading beyond the obvious beach and gateway markets.

Inbound travel is improving, but not fully healed

The hotel upgrade does not erase the risks facing inbound travel to the United States. CoStar and Tourism Economics expect international inbound travel to the U.S. to grow 3.4% in 2026, but that is a 30-basis-point pullback from the February forecast. The firm cited improvement from Europe and Latin America, continued weakness from Canada and Asia Pacific, and a World Cup lift that accounts for part of the year's projected gain.

U.S. Travel's spring forecast is similarly cautious. It expects inbound visits to reach 70.6 million in 2026, still below the 2019 level of 79 million, with a full return to that benchmark not expected until 2029. The association also flagged policy conditions, visa wait times, global sentiment and geopolitical stability as risks to the recovery.

That uneven inbound picture is important for hotels and destinations. If international arrivals underperform in some markets while domestic demand remains resilient, pricing power may cluster around specific events, premium properties and drive-accessible resorts rather than spreading evenly across the country.

What travelers and travel sellers should do now

The practical takeaway is not that every U.S. hotel will be expensive this summer. It is that demand is becoming harder to generalize. Travelers should book earlier for event weekends, compare airport and downtown locations, and check whether the savings from an outlying hotel survive the cost of rideshares, parking or car rental. Travel advisors and package sellers should watch city calendars as closely as airfare, because concerts, sports, conventions and holiday weekends can change hotel economics faster than national averages suggest.

For airport-heavy itineraries, especially in World Cup and major-event cities, ground planning deserves the same attention as lodging. Travelers using Bay Area matches and summer trips through SFO can review SFO transfer options or SFO car rentals before choosing a hotel far from the airport or venue. In the New York area, where hotel demand can shift quickly around sports and summer events, visitors can compare JFK airport transfers, JFK car rental, EWR transfers and EWR car rental based on hotel location.

The upgraded forecast is ultimately a positive signal for the U.S. travel economy. It shows that travelers are still prioritizing trips despite cost pressure, that business and group demand is rebuilding, and that major events can create meaningful local lift. But it also rewards travelers who plan with precision. In summer 2026, the better question is not whether travel demand is strong. It is where, when and for which kind of trip that strength will show up first.