In Brief: STR forecasts a moderate improvement in U.S. hotel performance in 2027 as GDP growth accelerates, inflation eases, and new hotel supply remains limited, though comparisons with the 2026 FIFA World Cup and a shift in the Easter calendar could weigh on monthly results.
Economic Conditions Support Forecast
U.S. hotel performance is expected to improve modestly in 2027, supported by projected economic growth, lower inflation and a slowdown in hotel construction, according to forecasts presented by STR senior forecasting analyst Jake Bruno at the Hotel Data Conference.
STR and Tourism Economics expect U.S. gross domestic product to increase 2.7% in 2027, following projected growth of 2.3% in 2026. Inflation is forecast to decline from 3.2% in 2026 to 2.4% in 2027. Bruno said the combination could support travel demand because salary growth has continued to exceed inflation.
Bruno said households with combined income of $200,000 or more represent 25% of U.S. travel spending, and the share of households in that income bracket is increasing.
Credit-card delinquencies have risen from a year earlier, a trend that can weaken demand at economy hotels. Bruno said a 1% increase in 90-day credit-card delinquency is associated with a 40-basis-point decline in economy hotels.
Group and Corporate Demand Provide Stability
Group and corporate travel are expected to remain more stable sources of hotel demand than transient travel. Bruno said those segments have returned as contributors to hotel performance, with the recovery becoming more evident since February 2026.
Activity tied to artificial intelligence and data centers is also affecting hotel market results.
International inbound travel remains less predictable, Bruno said. Where inbound travel has increased, gains have generally been below 1%. International visitors are more likely to stay in upper-end hotels.
Construction Slowdown Limits Supply Growth
STR projects U.S. hotel supply will increase 0.4% year over year in 2026 and 0.6% in 2027. Hotel construction volume is at its lowest level in 12 years.
Bruno said occupancy is projected to improve through 2027, with the first quarter expected to show particular strength in room rates.
San Francisco leads U.S. markets in rooms under construction year over year. Its growth follows a period of weak performance after the COVID-19 pandemic and begins from a relatively low base.
While most of the top 25 U.S. hotel markets are outpacing inflation, Bruno said 42% of all U.S. hotel markets are doing so.
Rates and Segment Performance
Average daily rate is forecast to remain below the inflation rate in 2027. STR expects comparisons with the 2026 FIFA World Cup to affect revenue and rate measurements, particularly during the summer.
Luxury hotels are expected to continue posting strong results. The upscale segment is forecast to have flat occupancy and consistent average daily rates. Reduced new supply is expected to support occupancy, though demand growth is expected to moderate.
Calendar Changes Affect Monthly Comparisons
Easter will move from April in 2026 to March in 2027, a shift expected to affect business travel and year-over-year comparisons for March.
The second and third quarters will face comparisons with the 2026 FIFA World Cup. STR forecasts U.S. revenue per available room to decline 0.8% in June 2027 from the prior year, although occupancy is expected to rise.
Bruno said the expected June decline reflects rate gains generated by the World Cup in 2026. The forecast anticipates underlying structural growth in 2027, with room-rate comparisons affected by the prior year’s event-driven increase.
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