CoStar, Tourism Economics Downgrade Growth Projections in Revised U.S. Hotel Forecast Through 2026

In a revised 2025-26 U.S. hotel forecast presented at the NYU International Hospitality Investment Forum, CoStar and Tourism Economics have adjusted their growth projections downwards. This was due to weaker performance in the first quarter and concerns about the overall economy. Projections for key metrics such as supply, demand, ADR, and RevPAR were reduced for both 2025 and 2026.

STR president Amanda Hite noted that despite growth in overall performance, demand will likely remain soft until consumer confidence improves, especially in lower-priced segments. While the group segment is being driven by rates, the recovery in business transient sectors is expected in various industries. However, leisure gains may be limited as booking windows shorten, posing challenges for hoteliers in the near future.

Tourism Economics’ director of industry studies, Aran Ryan, expressed concerns about higher prices for consumers, a weakened labor market, reduced business investments, and low international visitor numbers in the second half of the year. Although recession risks have decreased, both the economy and the travel sector are expected to face challenges in the upcoming period.

The forecast also adjusted the projection for gross operating profit per available room (GOPPAR) downwards by $3 for 2025. Hite added that while GOP growth will persist, it will be slower due to weaker demand, increased departmental costs, and limited margin gains from additional revenues. Adjusted for inflation, GOP has decreased compared to the previous year.