U.S. hotel demand is proving stronger than expected heading into the core summer travel season, a fresh forecast upgrade that matters for travelers, travel advisors and companies budgeting trips in the months ahead.
CoStar and Tourism Economics raised their 2026 U.S. hotel revenue-per-available-room outlook on June 1 after the first four months of the year outperformed earlier projections. The firms now expect RevPAR, a key lodging-industry measure that combines occupancy and average daily rate, to rise 2.8% year over year in 2026. That is a meaningful upgrade from the prior forecast and a sign that hotels are seeing broader demand from leisure guests, business travelers and group meetings.
The revised outlook does not mean every trip will become more expensive in the same way. It does suggest that travelers planning summer vacations, event trips and business meetings should expect less discounting in strong markets and more pressure around dates tied to major events. For the U.S. travel industry, the upgrade is a signal that domestic demand remains resilient even as international inbound travel and consumer sentiment remain uneven.
Why the Forecast Changed
CoStar said U.S. hotel RevPAR grew 4.0% year over year through April, and first-quarter RevPAR reached a record high. Demand has improved across more parts of the market than it did during the weaker 2025 cycle, when growth was more concentrated in higher-end hotels and several segments struggled to keep pace with costs.
One important shift is the recovery of group travel. CoStar reported that group demand, defined as bookings of 10 or more rooms, grew 2.7% between February and April, with particularly solid gains in secondary markets that host small and midsize events. That matters because meetings, conventions, youth sports, corporate gatherings and association events can fill rooms on dates that are not always peak leisure periods.
Transient demand, which includes individual leisure and business travelers, has also improved. CoStar noted that demand has risen 2.0% year over year since the start of 2026. Business Travel News, reporting from the NYU International Hospitality Investment Forum, said the firms now expect occupancy to increase by 0.5 percentage points this year, while average daily rate is projected to rise 2.0%.
What It Means for U.S. Travelers
For American travelers, the practical takeaway is that hotel pricing may be less forgiving than it looked earlier in the year, especially in markets with strong events, limited new supply or heavy summer leisure demand. Rate pressure is likely to be most visible in upper-tier hotels, resort destinations and cities with compressed event calendars.
CoStar said average daily rate growth remains concentrated in the upper tier, with luxury ADR nearly 6% higher year to date through April. Select-service hotels are improving, but their rate growth remains closer to 2%, below inflation. Lower-end properties are seeing some demand improvement, but rate weakness continues among travelers most affected by price pressure.
That split is important. A family booking a road trip, a small business sending staff to a trade show and a couple planning a resort stay may all experience the market differently. Travelers who are flexible on dates, neighborhoods and airport choice may still find value, while travelers locked into a conference, match, concert or holiday weekend may face tighter availability and higher rates.
World Cup Demand Is Helpful, but Uneven
The 2026 FIFA World Cup is one of the biggest demand variables for U.S. hotels this summer. CoStar and Tourism Economics expect the tournament to support hotel performance, but the impact is not expected to be uniform. CoStar pointed to markets including Dallas, Los Angeles and San Francisco where forward-looking occupancy indicators are running ahead of last year, while also noting that the size of the premium depends on match location, team draw and traveler mix.
That cautious tone is consistent with the American Hotel & Lodging Association’s recent World Cup hotel outlook, which warned that expected demand had not yet translated into strong bookings across all host markets. AHLA said domestic travelers were outpacing international travelers, creating a weaker-than-hoped-for mix for destinations that were counting on high-spend overseas visitors.
For readers building World Cup itineraries, this means hotel strategy should be local rather than national. A match city with a marquee team, limited downtown room supply and strong weekend demand may price very differently from another host city with more available inventory. Travelers flying through major gateways can compare airport logistics and onward plans through Odyssey’s airport resources for Dallas/Fort Worth International Airport, Los Angeles International Airport and San Francisco International Airport.
Domestic Demand Is Offsetting Some Inbound Weakness
The hotel forecast also shows how much the U.S. lodging market is relying on domestic resilience. CoStar and Tourism Economics now expect international inbound travel to the United States to grow 3.4% in 2026, a modest pullback from their earlier forecast. The firms said weakness continues from Canada and Asia-Pacific markets, even as Europe and Latin America have shown improvement.
At the same time, the firms downgraded U.S. outbound travel growth from 4.6% to 3.8%, meaning more Americans are expected to remain stateside than previously projected. That shift can support domestic hotels, particularly resorts and middle-to-upper-tier properties, but it also adds competition for rooms in popular U.S. destinations.
For travel sellers, this is a useful planning signal. Domestic packages, fly-drive trips, city breaks and event-linked hotel stays may remain attractive even if some international inbound segments underperform. For consumers, it means the best deals may depend less on whether demand is strong nationally and more on how much local inventory is available for a specific set of dates.
New Hotel Supply Remains Limited
Another reason the forecast matters is supply. CoStar lowered its 2026 supply-growth expectation from 0.7% to 0.4%, and said only 19% of the 767,000 rooms in the development pipeline are currently under construction, the lowest share in that phase in 12 years. Inflation, higher business costs and financing uncertainty are slowing the path from planned projects to open rooms.
Limited new supply can help hotel owners hold rates in strong markets, but it can also make busy periods harder for travelers. In cities where airport hotels, downtown properties and event-adjacent rooms already fill quickly, planning earlier may matter more than waiting for last-minute discounts. Travelers using Boston as a summer gateway, for example, can compare confirmed airport lodging options through Odyssey’s Logan International Airport hotel guide.
The Bottom Line
The upgraded U.S. hotel forecast is a bullish signal for the lodging industry, but not a blanket guarantee of a travel boom. Demand is improving, group travel is recovering, summer events are supporting occupancy and more Americans may stay within the United States. At the same time, international inbound weakness, inflation, higher fuel costs and uneven World Cup booking patterns remain real constraints.
For U.S. travelers, the smartest move is to treat hotel planning as a market-by-market decision. Book early for fixed event dates, compare airport and city-center locations, watch cancellation rules carefully and avoid assuming that national averages will match the city on your itinerary. For the travel industry, the June forecast upgrade is a reminder that the U.S. hotel market has momentum, but the winners this summer will be the destinations and operators that convert stronger demand into reliable, well-priced travel experiences.