NEW YORK CITY — At Monday’s NYU International Hospitality Investment Forum in New York City, CoStar and Tourism Economics significantly upgraded their U.S. hotel performance outlook. The companies now anticipate RevPAR will increase 2.8% year over year for full-year 2026, according to data presented at the annual conference.
CoStar and Tourism Economics forecast that occupancy will increase to 62.8% in 2026, as compared to 62.3% in 2025, while ADR will rise 2% year over year for the full year, Jan Freitag, national director of hospitality analytics at CoStar Group, said Monday.
The updated outlook comes after hotel performance exceeded previous projections in the first four months of 2026, according to a report published by the companies Monday. However, the outlook “remains complex,” due to challenges threatening growth, including macroeconomic uncertainty and geopolitical conflict, per the report.
Improving performance fundamentals
CoStar and Tourism Economics presented their revised hotel performance forecast Monday after U.S. RevPAR increased 4% year over year for the period spanning January and April. Additionally, RevPAR in the first quarter of this year was the highest on record, per the release.
The gains followed a rocky RevPAR environment in 2025, when U.S. hotel occupancy and RevPAR both fell on an annual basis for the first time since 2020.
Despite “persistent macroeconomic uncertainty, a longer-than-expected conflict with Iran and continued pressure on the current administration from both global and domestic front” in the first quarter of this year, “strong leisure travel demand, increased business travel recovery and strengthening event calendars are driving performance forward,” the release said.
CoStar and Tourism Economics predicted solid hotel performance this summer, in part because of the FIFA World Cup. While hotel booking surrounding the event has tracked below expectations, several markets including Dallas, Los Angeles and San Francisco are seeing promising demand indicators, per the release.
Overall, both companies now anticipate international inbound travel to the U.S. to increase 3.4% year over year for full-year 2026. Meanwhile, their forecast for U.S. outbound travel for 2026 has been downgraded from 4.6% to 3.8% growth, with more travelers remaining stateside, per the release.
Industry pros weigh in at NYU IHIF
Experts at NYU IHIF weighed in on the prevailing headwinds and tailwinds that could impact hotels this year.
During a Monday general session at NYU IHIF, Robert O’Leary, deputy assistant secretary for travel and tourism at the International Trade Administration, said there is a “decade of big demand,” ahead for the country, which will be driven by megaevents such as the World Cup this year, the Summer Olympics in Los Angeles in 2028 and the Winter Olympics in Park City, Utah in 2034.
According to data from the National Travel and Tourism Office, U.S. international visitation is forecast to increase 25% between 2025 and 2030. Weakening international sentiment, though, could pose a challenge to U.S. hotel performance growth this year, Adam Stacks, president of Tourism Economics shared Monday.
Additional headwinds include inflation and a softening labor market, Stacks noted. Rising costs, including labor, are a top concern among hotel professionals this year.
Despite certain challenges, CoStar and Tourism Economics forecast that all hotel chain scales will see RevPAR growth this year, with the luxury segment poised to see the most significant gains, up 5.3% year over year.
