CoStar and Tourism Economics downgraded growth projections in a revised 2025-26 US hotel forecast just released at the NYU International Hospitality Investment Forum.

Given first quarter underperformance and elevated macroeconomic concerns, according to the research, forecasted growth rates for 2025 were lowered across the top-line metrics: supply down 0.1 percentage points (ppts), demand down 0.6 ppts, average daily rate (ADR) down 0.3 ppts and revenue per available room (RevPAR) down 0.8 ppts. 

Similar adjustments were made for 2026: supply down 0.5 ppts, demand down 0.3 ppts, ADR down 0.7 ppts and RevPAR down 0.6 ppts. 

Amanda Hite, president of STR, a CoStar subsidiary, said top-line performance is still growing even in the current environment.  Until consumer confidence improves, however, she said, demand is going to remain softer—especially in the middle and lower price tiers.

Rate is pushing the top line in the group segment, said Hite, and business transient should continue to recover in a lot of industries, but leisure gains are going to be more isolated. Forward-looking data continues to support the observations of many industry stakeholders that booking windows have shortened, said Hite, adding the challenges hoteliers will face in the coming quarters.

Aran Ryan, director of industry studies at Tourism Economics, said the second half of the year should see consumers facing higher prices and a weaker labor market, businesses tapping the brakes on investment and soft international visitor volumes. While recession risks have eased, he said, “the economy—and the travel sector—will walk on a tightrope through this period.”