Just when many hotel operators were preparing for another year of cautious budgeting and crossing their fingers, along comes a forecast suggesting America’s accommodation sector may have a little more life left in it than expected.
Industry analysts at CoStar Group and Tourism Economics have upgraded their outlook for the US hotel market, citing stronger demand, improving occupancy, and healthier room revenues than previously forecast.
In a travel sector that has spent much of the decade bouncing between optimism and anxiety, that’s news worth paying attention to.
The revised forecast lifts expectations for both Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR) during 2026, while occupancy is now tipped to rise rather than fall. That may sound like accounting jargon to outsiders, but inside hotel boardrooms it translates into a much simpler phrase: more guests through the door.
And plenty of them.
According to CoStar Group, US hotels recorded more than eight million additional room nights during the first four months of 2026 compared with the same period last year. That’s not a statistical twitch. That’s meaningful growth.
Jan Freitag, National Director of Hospitality Analytics at CoStar Group, said the industry’s outlook had strengthened considerably since the company’s previous forecast.
“The cautious optimism that framed our outlook earlier in the year has made way for a more robust forecast, driven by stronger demand from both the group and transient segments,” Freitag said.
“Since our last revision, the industry has seen sustained performance growth, with room demand up by more than 8 million room nights year over year through the first four months of 2026.”
Translation? Corporate meetings are returning. Holidaymakers are still travelling. Americans continue to prioritise experiences over possessions, even while inflation remains a household dinner-table topic.
That resilience has surprised some observers.
Tourism Economics Director of Industry Studies Aran Ryan believes consumers are proving more stubbornly committed to travel than many economists anticipated.
“Travel activity appears resilient heading into the summer. Stable job markets and rising household wealth are supporting leisure travel demand despite higher fuel prices,” Ryan said.
For travel professionals, that observation may be the most important line in the entire report.
For the past two years, analysts have repeatedly warned that consumers would eventually pull back. Yet travellers continue to find reasons to board aircraft, check into hotels, and spend money on experiences.
The corporate sector is also helping to keep hotel corridors busy.
Ryan noted that improving group travel activity and strong corporate profitability are contributing to demand growth, providing another valuable revenue stream for operators who rely on conferences, meetings and incentive travel programs.
International arrivals remain softer than many destinations would like, but there is growing hope that upcoming global sporting events, particularly the FIFA World Cup, could provide the spark needed to bring more overseas visitors back into the market.
Of course, hotel executives know there is always a catch.
The industry may be selling more rooms and generating higher revenue, but costs continue to climb almost as fast as the lifts in a Las Vegas resort tower.
Freitag warned that while Gross Operating Profit (GOP) is expected to increase, rising expenses will continue squeezing margins.
“GOP is expected to rise on increasing total revenues, with the largest growth contribution coming from the rooms department,” he said.
“However, expenses are anticipated to grow at a higher rate, resulting in a continued squeeze in profit margin.”
That reality means many operators will celebrate stronger revenues while simultaneously watching accountants sharpen their pencils.
Still, after several years dominated by labour shortages, inflation shocks and economic uncertainty, most hoteliers would gladly take a profit-margin challenge over an occupancy crisis.
For now, America’s hotel sector appears to have achieved something that looked increasingly difficult only months ago: genuine forward momentum.
And in an industry where confidence can sometimes be as valuable as cash flow, that may have turned out to be the biggest upgrade of all.
For further information, visit https://www.costargroup.com.
By Sandra Jones – © 2026.
Read Time: 3 Minutes.
About the Author.
Sandra has spent a working lifetime quietly rescuing journeys, one itinerary, one anxious caller, one impossible connection at a time. Years in Australia’s finest travel agencies taught her the art of calm, how to find a flight in a fog of cancellations, how to soothe a traveller when luggage wanders, how to turn nine frantic days in Europe into something resembling sense. Qualified, seasoned, endlessly patient, she learned that good travel advice is part logistics, part listening.
But the storyteller in her was always waiting its turn. Writing offered a new map, a way to turn experience into reflection, detail into delight. At Global Travel Media, Sandra now writes the truths only insiders know: the mishaps, the laughter, the grace found between gates and goodbyes. She reminds us that travel, for all its fuss, is still one of life’s better ideas.
