The Strong Close to 2026
We’ve been going through CoStar and STR’s fall numbers. 2027 doesn’t look the way most of the headlines suggest.
Start with where things stand right now. U.S. hotels just closed an 18-week streak of positive year-over-year RevPAR. The week ending August 15 alone was up 6.2%. Occupancy sat at 68%, with ADR up to $163.56. CoStar and Tourism Economics raised their full-year 2026 forecast to 4.4% — well above what anyone had projected back in February. That’s a strong year by any measure.
Why 2027 Looks Different
Almost every analyst worth listening to draws the same line between 2026 and 2027. STR’s Kelsey Fenerty called next year a “low, slow growth environment.” CoStar and Tourism Economics now put 2027 RevPAR growth at just 2.1%. Occupancy is expected to hold near 63-64% for years — what Fenerty calls the industry’s “optimal occupancy.”
Booking Windows and the Flight Factor
Scott Hilchey, who runs consumer analytics on our advisory team, starts with a different number entirely. “Two things: how many days out people are booking, and what’s happening with flights,” he says.
That’s not an academic detail. “Airfare keeps climbing, and once it gets expensive enough, business travelers log into Zoom instead of getting on a plane. Leisure travelers trade the long haul trip for somewhere closer to home.” That tracks with the broader data too — booking windows are running 10 to 20% shorter than they were in 2019. Demand keeps forming later, with less notice.
Peak Pricing and Consumer Fatigue
Chris Henry sees a bigger risk sitting underneath the pricing story. “I think we’re at or near peak pricing right now,” he says. “People have dealt with years of heavy inflation, and the average consumer doesn’t have the savings left to keep funding vacations at these rates. Airfares and room rates have climbed fast, and I don’t think that holds. A lot of people are living on credit, and credit runs out.”
He’s also watching something further out. “If the administration can’t get the bond market under control and we keep heading toward a sovereign debt problem, that changes the picture for the whole global economy,” Chris Henry says. “A devalued dollar and higher interest rates would slow consumer spending. But it would also force a sell-off of assets that are underwater. Nobody knows for sure yet, but it’s something we’re watching closely.”
The Supply Side Advantage
On the supply side, the picture favors owners who already have assets on the ground. New room supply sits at 0.4% growth this year and 0.6% next. Only 19% of the pipeline is under construction — the lowest share in 12 years. Add a roughly $48 billion hotel CMBS maturity wall, and existing, well-located properties keep real pricing power. Meanwhile, a lot of owners face hard refinancing conversations.
Cautious Optimism for 2027
So is 2027 something to be optimistic about? “Cautiously,” Chris Henry says. “There’s a lot of geopolitical noise right now, and any one of those things could break good or bad. Aim high, but cover your downside.”
If you’re weighing a hospitality investment for 2027, that’s exactly the conversation our team has with clients every week. Our Financing team runs acquisition due diligence, investment analysis, and deal structuring on projects like this — before you commit to a deal built on this year’s numbers instead of next year’s reality.