Dive Brief:
- In 2026, growth for the U.S. lodging industry will slow down following a period of post-COVID-19 reset, with supply growth expected to outpace demand growth, according to PwC’s December Hospitality Directions U.S. outlook.
- ADR is anticipated to increase 1.1% year over year in 2026, while average occupancy stands at 62.2%, according to PwC’s analysis of STR data as of September 2025. RevPAR, while expected to have declined by 0.2% in 2025, is forecast to rise 0.9% in 2026.
- “While not a rebound, the forecast suggests a steadier trajectory ahead,” PwC stated in its report. “Still, margin pressure is likely to intensify as supply grows faster than demand and inflationary pressures create a drag on flow-throughs, leaving operators and owners with narrower cushions and higher stakes.”
Dive Insight:
According to the report, a more stable macro environment, easier year-over-year comparisons, particularly in the latter half of 2026, and major national events in 2026 are expected to support a stable path forward.
Some signs of stabilization, such as traveler’s shifting priorities, were evident in 2025, particularly in the second half. The report cited its 2025 Holiday Outlook report, which indicated that 44% of consumers planned to travel for the holiday season, “pointing to a renewed emphasis on experiences.”
“That sentiment, paired with a clearer macro-economic picture, a steadying credit environment, and a robust 2026 events calendar, suggests conditions are forming for moderate, if uneven, RevPAR growth,” PwC said in its 2026 outlook.
While leisure travel demand, particularly in warmer and secondary markets, is on the rise, corporate, group and international inbound travel have been slower to rebound. According to the report, the first two quarters of 2026 could be hindered by short-term RevPAR growth headwinds, while in the second two quarters, business and inbound international travel would see boosts from large-scale events and a more stable macro environment.
Hotel supply is starting to grow, though it remains below long-term averages. Still, “we forecast rising supply will outpace still-fragile demand,” the report states. Luxury hotels were expected to have experienced the strongest supply growth in 2025, while the economy segment is expected to remain flat.
“By 2026, however, development activity is projected to further normalize, with supply expanding more evenly across all chain scales — marking a shift away from the bifurcation that has characterized the industry in recent years,” according to the report.
“If 2025 was a year of recalibration, 2026 offers a slow, deliberate step forward. The industry isn’t reverting to past cycles, nor entering decline. It’s adapting to a landscape where growth should be earned.”
