CoStar and Tourism Economics downgraded growth projections in a revised 2025-26 U.S. hotel forecast just released at the NYU International Hospitality Investment Forum.
Given the first quarter underperformance and elevated macroeconomic concerns, forecasted growth rates were lowered across the top-line metrics: supply (-0.1 ppts), demand (-0.6 ppts), ADR (-0.3 ppts) and RevPAR (-0.8 ppts).
Similar adjustments were made for 2026: supply (-0.5 ppts), demand (-0.3 ppts), ADR (-0.7 ppts) and RevPAR (-0.6 ppts).
“Top-line performance is still growing even in the current environment,” STR President Amanda Hite said. “Until consumer confidence improves, however, demand is going to remain softer—especially in the middle and lower price tiers. Rate is pushing the top line in the group segment, and business transient should continue to recover in a lot of industries, but leisure gains are going to be more isolated. Our forward-looking data continues to support the observations of many industry stakeholders that booking windows have shortened. That adds to the challenges hoteliers will face in the coming quarters.”
“We’re looking ahead to a second half of the year with consumers facing higher prices and a weaker labor market, businesses tapping the brakes on investment, and soft international visitor volumes,” said Aran Ryan, director of industry studies at Tourism Economics. "While recession risks have eased, the economy—and the travel sector—will walk on a tight rope through this period."
The projection for gross operating profit per available room was also lowered $3 for 2025.
“While GOP growth will continue, the pace will be modest due to softer demand, rising departmental costs, and limited margin gains from ancillary revenues,” Hite said. “When adjusted for inflation, GOP is down from last year.”