U.S. hotels are entering the summer with a stronger outlook than forecasters expected just a few months ago, and the shift says a lot about how Americans are traveling in 2026: more trips are staying closer to home, domestic resort markets are benefiting, and travelers may find that hotel pricing is firmer in popular U.S. destinations even as outbound travel growth cools.
CoStar and Tourism Economics have upgraded their 2026 U.S. hotel forecast, now projecting revenue per available room, or RevPAR, to rise 2.8% for the year. The update follows a better-than-expected start to 2026, with U.S. hotel RevPAR up 4.0% year to date through April and first-quarter RevPAR reaching a record level, according to CoStar's June forecast assumptions.
The revision is important because it is not being driven by a single event or one luxury-heavy pocket of demand. CoStar and Tourism Economics point to a mix of resilient leisure travel, improving business and group demand, stronger event calendars and a notable shift in outbound behavior. Their latest assumptions downgrade U.S. outbound travel growth for 2026 from 4.6% to 3.8%, with more Americans remaining stateside. That is helping middle- and upper-end properties, particularly in resort markets.
Why the forecast changed
Earlier in the year, U.S. hotels faced a more cautious forecast. Inflation, higher fuel costs, geopolitical uncertainty and weak consumer sentiment all raised questions about whether travelers would pull back. Instead, the first four months showed stronger-than-expected demand.
CoStar's data shows U.S. hotel demand up 2.0% year over year since the start of 2026. Transient bookings improved after late 2025, while group demand grew 2.7% between February and April, with gains especially visible in secondary markets that host small and midsize events. The forecast also notes that stronger performance on shoulder days, such as Sundays and Thursdays, points to a broader demand recovery rather than a narrow weekend leisure spike.
Hotel Dive, reporting from the NYU International Hospitality Investment Forum, said CoStar and Tourism Economics now expect U.S. hotel occupancy to reach 62.8% in 2026, up from 62.3% in 2025, while average daily rate is projected to rise 2.0% year over year. The same report said RevPAR gains are expected across all hotel chain scales, with luxury still leading but midscale and upper-midscale properties also improving.
What it means for American travelers
For travelers, the brighter hotel forecast is a mixed signal. It suggests the U.S. travel market is healthier than expected, but it also means that bargain-hunting in domestic leisure markets may be harder during peak dates, major events and popular drive-market weekends.
The clearest practical takeaway is that domestic trips should not be treated as automatically cheaper or easier than international alternatives. When more Americans redirect long-haul or overseas plans into U.S. destinations, demand concentrates around beach markets, national parks, major events, family resorts, casino destinations and convenient airport gateways. That can affect room rates, cancellation flexibility, rental-car availability and airport transfer costs.
Travelers flying into major leisure gateways should compare the whole trip, not just the room rate. For example, Orlando travelers can check flight options through Orlando International Airport and review MCO car rental options before locking in a hotel. Visitors heading to Las Vegas can compare LAS flight access and Las Vegas airport car rental, especially if the trip includes side visits outside the Strip. Mountain and western road-trip travelers may want to compare gateways such as Denver International Airport and DEN car rental when evaluating resort-area costs.
Domestic demand is becoming a bigger planning factor
The hotel upgrade lines up with broader travel-market data. The U.S. Travel Association's spring forecast said domestic travel accounts for 87% of total U.S. travel spending and has returned to 2019 inflation-adjusted levels. It also projected domestic leisure travel spending to rise 0.9% in 2026 to $909 billion, while noting that travelers are shifting toward shorter-duration and lower-cost trips in response to higher costs.
Hotel-search data points in the same direction. Lighthouse reported that, across G20 countries, the share of hotel searches made by domestic travelers rose year over year in the first quarter of 2026, with North America showing the fastest shift. In the U.S., domestic hotel-search share rose 7% year over year in Q1 and stood at 74%, according to the company's analysis.
That does not mean every U.S. hotel market will be strong. Demand is still uneven, and travelers remain price-sensitive. CoStar's forecast notes continuing rate weakness at lower-end properties, where guests are more exposed to household budget pressure. U.S. Travel also warns that travel demand remains sensitive to energy prices, geopolitical instability, consumer sentiment and inbound-travel policy friction.
Why this matters for travel sellers and destinations
For travel advisors, tour operators and destination marketers, the new forecast makes domestic packaging more important. A U.S. itinerary that once looked like a backup to Europe or the Caribbean may now be the trip that converts, particularly for families watching airfare, travelers who want shorter booking windows, or groups trying to avoid international uncertainty.
That puts more value on practical packaging: airport choice, ground transportation, parking, hotel flexibility, shoulder-night pricing, event calendars and the cost of getting from the airport to the actual vacation area. For hotels, the opportunity is not only higher rates. It is also a chance to win travelers who are still willing to spend on experiences but want clearer value and fewer surprises.
The stronger U.S. hotel outlook should therefore be read as both a recovery signal and a planning warning. Americans are still prioritizing travel, but many are reshaping trips around cost, convenience and uncertainty. In 2026, that makes domestic hotel demand one of the most important indicators to watch across the U.S. travel market.