U.S. hotel demand is entering the summer travel season on firmer ground than expected, after CoStar and Tourism Economics raised their 2026 revenue-per-available-room outlook and pointed to stronger leisure travel, recovering group business and a heavier event calendar as key drivers.
The revised forecast, published June 1 and discussed at the NYU International Hospitality Investment Forum, now calls for U.S. RevPAR to rise 2.8% this year. That is a meaningful upgrade for a hotel market that spent much of 2025 under pressure from uneven consumer demand, softer occupancy and concerns about international inbound weakness.
For American travelers, the shift matters because hotel pricing and availability are likely to be less forgiving in strong leisure markets, major event cities and higher-end segments. For travel advisors, tour operators and package sellers, the new forecast suggests that summer 2026 should be planned around selective strength rather than a broad slowdown.
Why the forecast changed
CoStar and Tourism Economics said the first four-plus months of 2026 outperformed earlier projections. U.S. RevPAR was up 4.0% year over year through April, and first-quarter RevPAR reached a record high.
Demand growth has not come from one narrow pocket of the market. The report says U.S. hotel demand increased 2.0% year over year since the start of 2026, while group demand rose 2.7% between February and April. That group recovery is especially important because meetings, conferences, weddings, sports events and corporate gatherings can compress hotel availability quickly in specific cities.
Hotel Dive, which covered the forecast from the NYU conference, reported that CoStar and Tourism Economics now expect U.S. hotel occupancy to reach 62.8% in 2026, compared with 62.3% in 2025, while average daily rate is projected to rise 2% year over year. The independent trade coverage also noted that the companies still see geopolitical uncertainty, inflation and weaker international sentiment as risks to the outlook.
Travelers should expect an uneven market
The upgraded forecast does not mean every U.S. destination will feel expensive or sold out. Instead, the market is becoming more segmented. CoStar’s update says average daily rate growth is concentrated in upper-tier hotels, with luxury ADR running just below 6% year to date through April. Select-service properties are seeing more modest rate growth of about 2%, while lower-end hotels are still facing rate weakness tied to price-sensitive consumers.
That split is important for families and budget-minded travelers. A strong national forecast can still leave room for deals in some roadside, economy and lower-demand markets, while popular resort areas, convention cities and stadium-event destinations become more expensive. Travelers who are flexible on exact dates or neighborhoods may still find value, but waiting for broad last-minute discounts looks riskier in markets with major demand drivers.
Bank of America Institute’s May summer travel report supports that uneven picture. It found that around 30% of surveyed consumers said higher gas prices would not change their summer travel plans, while many others were adjusting at the margin by reducing trips, choosing closer destinations or trimming accommodation budgets. The report also described a K-shaped travel season, with lower-income households much more likely to have no summer travel plans while middle- and higher-income households show stronger travel spending.
Events are doing more of the heavy lifting
Large events are a major reason hotels are more optimistic. The 2026 FIFA World Cup, America 250 programming and a stronger calendar of concerts and mid-sized events are expected to support summer performance, though not evenly across the country.
CoStar and Tourism Economics said World Cup expectations remain moderately optimistic but uncertain, with markets such as Dallas, Los Angeles and San Francisco showing stronger occupancy on the books than last year. The report also said event impact is likely to show up more through ADR premiums than through uniform occupancy gains, especially in upper-end hotel categories.
That means travelers heading to World Cup host cities, major concert stops or anniversary events should treat hotel planning as part of the trip’s core budget, not an afterthought. In high-demand windows, the cheapest room may be farther from the venue, less flexible or less convenient for airport connections.
Travelers flying through major gateways can also use Odyssey’s airport guides when comparing routes and local logistics, including Los Angeles International Airport, Dallas/Fort Worth International Airport, New York JFK, Chicago O’Hare, Miami International Airport and Orlando International Airport.
Inbound travel is improving, but still fragile
The hotel forecast also reflects a complicated international picture. CoStar and Tourism Economics expect international inbound travel to the United States to increase 3.4% in 2026, a slight pullback from their earlier forecast. The report says improvement has been concentrated in Europe and Latin America, while Canada and Asia-Pacific markets remain weaker.
The U.S. government’s National Travel and Tourism Office also expects inbound travel to recover, though gradually. Its official forecast projects total international visitation to the United States will rise 3.2% to 70.5 million visitors in 2026, helped partly by the World Cup, and grow to 85.2 million visitors by 2030.
For U.S. hotels, that creates a balancing act. International demand can lift gateway cities, resort markets and luxury properties, but sentiment, currency pressure, entry-policy concerns and geopolitical headlines can still affect how quickly foreign visitors return. Domestic travel is therefore doing more of the work in many markets, especially as CoStar and Tourism Economics downgraded their U.S. outbound travel growth forecast from 4.6% to 3.8%, with more travelers expected to remain stateside.
What this means for summer trips
The practical takeaway is that the U.S. hotel market is stronger than it looked earlier in the year, but travelers should not read the forecast as one simple national price story. The pressure points are specific: upscale hotels, event-heavy weekends, resort markets, high-demand airport gateways and cities where group travel has returned.
For leisure travelers, booking refundable hotel options earlier can preserve flexibility while avoiding the worst of event-driven price spikes. For business travelers and meeting planners, the stronger group-demand data argues for earlier room-block decisions and more careful backup planning. For travel sellers, packaged trips may become more valuable when they help customers see the total cost of airfare, lodging, airport transfers and local transportation before demand peaks.
After a soft and uneven 2025, the upgraded forecast is a sign that U.S. travel demand has not disappeared. It has become more selective, more event-sensitive and more divided by traveler budget. That is a better environment for hotels than expected, but it also makes careful planning more important for anyone trying to keep a summer trip affordable.