Login
The 2026 U.S. Hotel Industry Outlook: FIFA World Cup, Demand Shifts, and RevPAR Stabilization in Cities like Chicago, Houston, and Los Angeles—Here’s What Travelers Can Expect
The U.S. hotel industry, despite facing numerous economic hurdles and geopolitical uncertainties, is expected to experience a slight recovery in 2026. The forecast predicts a 0.6% growth in Revenue per Available Room (RevPAR), a welcome improvement after a tumultuous 2025, which marked the first non-recessionary drop in RevPAR in history. While the sector continues to grapple with issues such as economic uncertainty, geopolitical instability, and domestic tensions, there are also signs that the worst is behind them, with some market segments beginning to show signs of improvement.
The hotel industry’s performance is significantly tied to broader economic conditions. Despite the challenges, there is hopeful optimism that the recovery will gain momentum, particularly driven by the FIFA World Cup, which is anticipated to provide a boost to demand in specific U.S. markets.
Mixed Trends in Hotel Segments as Demand Shifts
While overall demand in the U.S. hotel market saw a 0.5% decline in 2025, recovery is on the horizon, with a forecasted +0.4% rebound for 2026. This growth is expected to vary by market segment. Hotels in the mid-tier and luxury segments are expected to see some relief, while select-service and economy hotels continue to face pressure. Average Daily Rates (ADR) are projected to grow by 1%, a modest uptick from the previous forecast of 0.9%.
The main contributors to demand decline in 2025 were Hurricane Milton and Hurricane Helene, which displaced large numbers of bookings in several U.S. regions. As those storm-related disruptions subside, demand growth is expected to gain strength in the second half of 2026.
Factors Behind the Stabilization of RevPAR in 2026
Despite the challenging backdrop, the hotel sector is expected to stabilize in 2026 for several reasons. One key factor is the calendar composition in 2026, which is more favorable than in 2025. This better calendar placement will help increase demand during holidays and peak travel periods. Additionally, the FIFA World Cup, scheduled for the summer of 2026, will undoubtedly boost hotel performance, particularly in host cities, as soccer fans flood the U.S. for the tournament.
The World Cup’s impact is projected to be felt across the U.S., Canada, and Mexico, where RevPAR could see a 0.4% lift, with certain cities benefitting more based on their proximity to the matches. France, Brazil, and Argentina are expected to be key demand drivers, drawing a substantial number of international visitors.
Outlook for Group Business and the Role of Event Tourism
The group business segment had a challenging 2025, with a 1.8% drop in demand. However, this was somewhat mitigated by a 4% rise in ADR, indicating that although there were fewer bookings, those who did book paid higher rates. Group demand is expected to stabilize in 2026, with solid rates and more short-term bookings, particularly in the latter half of the year.
As the U.S. sees more conferences, business events, and corporate travel returning in 2026, expect a more robust performance in hotels catering to this segment. While event-related tourism remains key to hotel performance in major cities, its fluctuations will need to be carefully managed.
Reduced Supply Growth and Its Impact on U.S. Hotels
Hotel supply is anticipated to grow at a slower rate in 2026, with an expected increase of 0.7%, a downward revision from the previous 0.9%. The construction pipeline remains strong, with nearly 767,000 new rooms in the pipeline, though a significant portion of these are still in the planning and early construction phases. With only 19% of these rooms under construction, supply growth will remain constrained in the short term, making it easier for hoteliers to maintain rates.
Notably, the conversion rate of existing hotels has surged, with nearly 1,900 hotels undergoing conversions in 2025, the highest since 2016. This indicates that hotel owners are finding it more viable to convert existing structures than to build new ones, a trend likely to continue in the face of rising construction costs and financing challenges.
Boost in International Demand and the Role of the FIFA World Cup
International travel to the U.S. is expected to rebound in 2026, with a 3.7% growth in inbound tourism, although levels will still be below those seen in 2019. The World Cup is predicted to play a significant role in this growth, contributing approximately 1.1% to the RevPAR increase, particularly in cities where matches are being held.
Outbound travel from the U.S. will also continue to rise, with 4.6% growth projected in 2026, following a 4.7% rise in 2025. These global travel trends indicate that U.S. hotels will not only benefit from international visitors but will also see increasing demand for international business and leisure travel from American travelers heading abroad.
Long-Term U.S. Hotel Industry Outlook: Subdued Growth Ahead
Looking beyond 2026, the U.S. hotel industry’s long-term prospects are expected to remain somewhat muted. The 2027 and 2028 projections reflect modest growth in RevPAR, at 1.4% and 2.0%, respectively. ADR will continue to be the primary growth driver, although it is expected to remain below the pace of inflation. These subdued forecasts indicate that the recovery in the hotel industry will be gradual, with demand likely to fluctuate based on broader global economic and political conditions.
Travel Tips for 2026: Booking Hotels and Navigating Key Events
- Book Early for World Cup Dates: Travelers planning to visit U.S. host cities during the FIFA World Cup should consider booking accommodations early. The surge in demand during match dates will likely lead to price increases and limited availability.
- Plan for Business Events: As business and corporate travel are forecasted to rise, hotels near convention centers and business districts will be in high demand. If you’re planning a visit during a major conference or event, early bookings are recommended.
- Keep an Eye on ADR Trends: Hotel prices will likely remain high in some regions, especially in premium segments. Travelers should watch for promotions and deals in the off-peak months.
- Flexibility is Key: Given the volatile nature of the market, be prepared for changes in availability and pricing. Booking flexible rates may help mitigate last-minute travel disruptions.
