LOS ANGELES — What the latest U.S. hotel industry forecast from CoStar Group and Tourism Economics lacks in excitement, it makes up for in providing certainty of some stability.
In a podcast interview with HNN at the Americas Lodging Investment Summit, Amanda Hite, president of STR, a CoStar Group company, said while there were some tweaks in the forecast, the overall revenue per available room growth projection is 1.8%, the same as in 2024.
There is more upside to the forecast, she said. There could be some unleashed spending from companies and individuals if the new presidential administration can get tax cuts approved. There could be a loosening of corporate spending that would benefit the hotel industry, giving it more upside. How much remains to be seen.
As one of the industry’s forecasters that hotel owners, operators and brands count on for planning, the forecast can’t be based on just hope, she said.
“We’ve got to have some certainty of understanding what changes structurally are going to impact and help lift it if we think there's upside, and it's just not there yet, but hold on and let's see what the next quarterly update looks like,” she said.
Among the changes in the most recent forecast is shifting more growth into the first half of the year from the second half due to higher than expected demand generated by hurricane response in affected markets, Hite said. There was strong demand carried over into the first quarter of 2025 from these events last year.
For 2026, the forecast shows RevPAR growth reduced by 40 basis points to 2.1%, she said. That’s the result of an offset of the stronger disaster-related performance, making it a harder comparison for the year.
There’s still a bifurcation in demand when looking at the chain scales, she said. The forecast accounts for demand to continue growing in the upper-tier segments. Group business is strong, and there’s some business transient demand as well. Weekday occupancy is growing.
Leisure demand will be more of the same, she said. There’s no big driver out there to create more demand because the issues of inflation and price-consciousness remain, which is affecting the mid- to lower tiers.
That said, the forecast calls for improved RevPAR in the economy segment after two years of being negative, she said. The segment has benefited from disaster-driven demand, and a further tailwind is that 5,000 hotel rooms will drop out of the system this year. Another 3,000 rooms will come out of independent hotels, many of which are economy properties.
“That's a real benefit to the existing hotels in the segment,” she said. “It allows a little more pricing power because you have just less supply there.”
International inbound travel demand isn’t expected to come back significantly stronger this year, Hite said. The real opportunity for international inbound demand comes in 2026 when the U.S. will host the World Cup.
“There's some hope and optimism that increased airlift capacity to Europe will help bring more international inbound this year, but it's probably going to take ’26 and the World Cup to really get that going, because people will wait to make that trip until ’26 with the World Cup across the country,” she said.
For all of HNN's discussion with Amanda Hite, listen to the podcast above.