U.S. Hospitality Market Outlook 2026: Current Conditions, Investment Trends, and Five-Year Forecast

Market Performance Overview: Occupancy, ADR, and RevPAR

The U.S. hospitality sector enters 2026 in the middle of a quiet but consequential reversal. In 2025 the industry recorded something it had never before posted outside of a recession: a full-year decline in revenue per available room. RevPAR slipped roughly 0.3% as occupancy gave back about 1.2%, and the air went out of a recovery that many operators had assumed would carry through the decade (1)(3). The cause was not a collapse in travel but a collision of soft international demand, tariff-driven caution in the corporate segment, and an ADR line that had finally stopped outrunning inflation. The story of 2026 is the story of that reversal reversing again.

Through the first four months of the year the recovery has reasserted itself with conviction. Room demand rose roughly 2.0% year over year, the strongest start in three years, and the industry sold more than 8 million additional room nightsversus the same period in 2025 (2). RevPAR climbed about 4.0% year to date, with the first quarter setting an all-time record on an absolute basis (2). That strength has forced a sharp upgrade in expectations. CoStar and Tourism Economics, which began the year projecting full-year RevPAR growth of only 0.6%, raised their forecast in June to roughly 2.8%, lifting the average daily rate assumption by a full point and flipping a projected occupancy decline into modest growth (2). The early-year consensus had been cautious across the board, with PwC at 0.9% and CBRE near 1.5%, which makes the upward revision itself one of the more telling signals of the year (4)(5).

The national picture, drawn from the MMCG database, frames the backdrop. The U.S. lodging stock now stands at approximately 5.78 million rooms across roughly 65,000 hotels, running at about 62.6% trailing twelve-month occupancy, an average daily rate near $162, and RevPAR of approximately $101 (1). Those averages, however, conceal the defining feature of the cycle: a market splitting in two. Luxury and upper-upscale hotels are operating at roughly 67.3% occupancy, a $281 ADR, and $189 RevPAR, while the midscale and economy tiers sit near 54.5% occupancy, an $86 ADR, and just $47 RevPAR (1). The high end is forecast to lead RevPAR growth at roughly 5.3% in 2026, even as the economy segment posts flat-to-negative ADR and demand (2). This is a barbell market, and the weight is concentrated at the top.

Interactive Graph - 2026 RevPAR by chain scale, luxury vs upper-midscale vs economy

Profitability tells the same story from a different angle. Average daily rate growth has run below the rate of inflation, which leaves operators little room to absorb rising wages, insurance, and utilities. Gross operating profit per available room remains close to 90% of its 2019 level even as nominal revenue has recovered, a reminder that the recovery in top-line performance has not fully translated into bottom-line margin (6). For owners and lenders, the implication is that 2026 is a year in which rate discipline and cost control matter more than occupancy gains, and in which the quality and location of an asset increasingly determine whether it participates in the recovery at all.

Exhibit 1: U.S. Hospitality National Key Indicators by Class, Trailing 12 Months 2026

Class	Rooms	12-Mo Occupancy	12-Mo ADR	12-Mo RevPAR	Rooms Under Construction
Luxury & Upper Upscale	1,306,900	67.3%	$281	$189	32,500
Upscale & Upper Midscale	2,468,600	66.7%	$149	$100	83,400
Midscale & Economy	2,007,900	54.5%	$86	$47	21,500
National	5,783,400	62.6%	$162	$101	137,400

Source: MMCG database. Data as of trailing twelve months, 2026. Figures rounded.

The Supply Picture: A Constrained Pipeline and an Aging Stock

If demand is the story of 2026, supply is the story of the next five years, and it is a story of scarcity. National room supply expanded by only about 0.5% through April, and the development pipeline, while large on paper, is increasingly aspirational rather than imminent (1)(2). The MMCG database counts roughly 137,000 rooms under construction, well below the 150,000-plus that was typical before 2025, and CoStar reports that this figure has now declined on a year-over-year basis for fifteen consecutive months (1)(2). The headline pipeline of nearly 767,000 rooms is close to a record, but only about 19% of those rooms are actually under construction, the lowest share in twelve years (2). Lodging Econometrics, the leading independent pipeline tracker, frames the same dynamic from its own data set, counting roughly 6,100 projects and 720,000 rooms in the total pipeline against only 1,088 projects and 134,000 rooms under construction at the close of 2025 (14). Projected net supply growth for 2026 has been trimmed to roughly 0.4%, a fraction of the long-run average near 1.6% (2).

The reason the pipeline is stalling at the planning stage is economics, not appetite. Elevated borrowing costs, conservative construction lending, and a building-cost base inflated by tariffs have made ground-up development difficult to justify against muted RevPAR growth. The HVS U.S. Hotel Development Cost Survey puts the all-in median cost to build at roughly $219,000 per key, ranging from about $167,000 for limited-service product to $409,000 for full-service hotels and beyond $1 million for luxury (15). New tariffs on steel, aluminum, copper, and lumber have added to the burden even as the broader rate of construction-cost inflation has decelerated toward the mid-single digits (15). The result is a market in which new product pencils only in the lowest-cost formats and the strongest submarkets.

Interactive Graph - rooms under construction by chain scale and the declining construction share

Where new supply is being built, it is overwhelmingly limited-service and extended-stay product. Those formats account for roughly 70% of rooms under construction, favored for their lower operating costs and stronger margins (1). Extended-stay in particular has emerged as the cycle's growth engine: demand for the segment rose about 2.2% in 2025 against a roughly flat industry, occupancy ran more than 12 percentage points above the national average, and extended-stay now represents close to 11% of all U.S. room supply (16). Luxury sits at the opposite pole, the fastest-growing chain scale by percentage at roughly 4.5% but off a tiny base of about 8,000 rooms, and increasingly dependent on branded-residential components to achieve feasibility (2). At the major brands, the reported figures look robust, with system-wide net unit growth near 6.7% at Hilton and 7.3% at Hyatt, but those numbers are global and heavily weighted toward conversions of existing hotels rather than new construction; IHG's U.S. net growth, for context, was closer to 1.6% (14). Conversions reached a near-record pace, with roughly 1,900 hotels rebranded in 2025, as franchisors harvested an aging independent stock rather than waiting for new ground to break.

That aging stock is itself a defining feature of the market. Approximately one in four U.S. hotels is now more than fifty years old, and a subdued pipeline will do little to change that arithmetic (1). The practical consequence is a rising wave of brand-mandated property improvement plans landing on owners at exactly the moment financing is most expensive, with renovation costs now running more than 30% above pre-pandemic levels (15). For well-located existing assets, constrained new supply is a durable tailwind for pricing power. For tired assets facing both a capital-expenditure cliff and a debt maturity, it is the beginning of a difficult conversation.

Regional Divergence: Gateway and Resort Strength Versus Sun Belt Supply Pressure

Hospitality in 2026 is a two-speed market geographically, and the dividing lines run along three axes: exposure to international demand, exposure to new supply, and exposure to the calendar of events that increasingly drives rate. The strongest performers combine gateway or resort positioning with thin pipelines, while the softer markets carry either heavy construction or a difficult prior-year comparison.

New York sits at the top of the table on nearly every measure. The market runs at roughly 84.0% occupancy, by far the highest in the country, with an ADR near $336 and RevPAR of approximately $282 (1). RevPAR there grew about 3.7%over the trailing year, well ahead of the national pace, driven by a recovering convention calendar, return-to-office demand, and the continued effect of Local Law 18, the short-term-rental restriction that has redirected displaced demand back into hotels (1). Group RevPAR in the market rose nearly 8.9%, a signal that conferences and meetings are returning to pre-pandemic cadence (1). The high-barrier coastal and resort markets tell a similar story, with Oahu near $221 RevPAR and Miami at roughly $174 (1).

Interactive Graph - 12-month sales volume and market cap rate by class

San Francisco has been the year's most dramatic turnaround. After years as the recovery's laggard, the market posted RevPAR growth of roughly 15% over the trailing year, propelled by a surge of corporate travel tied to the artificial-intelligence sector and a record Super Bowl LX, during which game-week RevPAR rose more than 175% (1)(5). Miami continues to convert a dense events calendar, from Art Basel and the Miami Open to the Formula 1 Grand Prix and Ultra, into rate, growing RevPAR about 4.5% even as occupancy edged slightly lower (1). Orlando has been a standout among leisure destinations, with RevPAR up roughly 5.2% as the May 2025 opening of Universal's Epic Universe added a major new demand generator and supported transient pricing power at the new luxury supply clustered nearby (1).

The Sun Belt growth markets present the cycle's clearest supply risk. Raleigh-Durham, Indianapolis, Phoenix, Miami, Nashville, and Dallas all carry construction pipelines exceeding 4.5% of existing inventory, with several markets, Nashville and Phoenix among them, showing combined under-construction and planned inventory consistent with potential supply growth above 10% over the next several years (1). Phoenix illustrates the tension well: the market is supported by a fast-growing corporate footprint in semiconductors and technology and posted RevPAR growth of about 2.0%, yet supply remains the primary near-term constraint on pricing power, and the market still absorbed the year's largest single-asset trade (1). Nashville, by contrast, has begun to decelerate outright, with RevPAR off about 0.5% as new rooms outpaced a still-healthy demand base (1). At the bottom of the performance table sit markets distorted by one-time prior-year events or genuine softness, including New Orleans, Tampa Bay, Houston, and Austin (1). For lenders weighing a hotel in any of these geographies, the spread between the national average and the local reality is precisely why submarket-level analysis, not national benchmarks, governs a credible projection.

Exhibit 2: Selected Market Performance Snapshot, Trailing 12 Months 2026

Market	12-Mo Occupancy	ADR	RevPAR	YoY RevPAR	Market Cap Rate	Price/Room
New York	84.0%	$336	$282	+3.7%	8.2%	$387,500
Miami	74.0%	$236	$174	+4.5%	8.3%	$424,800
San Francisco	71.0%	$237	$168	+15.1%	8.7%	$309,500
Orlando	72.1%	$207	$149	+5.2%	8.4%	$271,800
Las Vegas	74.7%	$202	$151	-6.4%	7.8%	$227,500
Phoenix	67.3%	$177	$119	+2.0%	7.5%	$311,000
Nashville	66.9%	$174	$116	-0.5%	8.9%	$252,500
National	62.6%	$162	$101	+0.5%	9.3%	$117,000

Source: MMCG database. Data as of trailing twelve months, 2026.

Structural Demand Drivers: Travel, Group, Inbound, and the Consumer

The 2026 demand recovery is built on a domestic foundation, with leisure as the broad base and a reaccelerating group segment as the marginal driver. Understanding which engines are firing, and which are not, is essential to judging how durable the upturn is.

Domestic leisure remains the cornerstone of demand. It is the only major travel vertical operating above its 2019 level in real terms, with spending forecast at roughly $909 billion in 2026, and it anchors the 87% of total U.S. travel spending that is domestic (11). The leisure consumer, however, is distinctly K-shaped. Roughly 51% of all leisure lodging expenditure now comes from households earning $150,000 or more, and the share of households earning above $200,000 has nearly doubled since 2018 (11). That concentration explains why luxury hotels are capturing the rate while economy hotels are not. A fiscal tailwind helps at the margin: provisions of the One Big Beautiful Bill Act are expected to deliver roughly $57 billion in additional tax refunds in 2026, with a meaningful share flowing into middle-income travel (11). Even so, the share of Americans planning a paid-lodging vacation has fallen to a six-year low, a reminder that breadth of demand remains fragile beneath the resilient top tier (10).

Group and meetings demand is the standout positive of the year. Group demand grew about 2.7% between February and April, with particular strength in secondary markets hosting small and mid-sized events, and it was the principal swing factor behind the overall demand upgrade (2). The return of conventions and corporate meetings is the clearest evidence that the segment most damaged by the pandemic has finally normalized.

Business travel is recovering, but slowly and unevenly. Domestic business travel spending is forecast to grow only about 0.7% in real terms to roughly $319 billion, the slowest of the major segments, and buyer sentiment deteriorated sharply through the first quarter as geopolitical instability weighed on corporate planning (11)(13). The exception is the artificial-intelligence corridor, where corporate travel has lifted markets such as San Francisco and San Jose to the top of the national performance table.

International inbound travel is the binding constraint, and the single largest risk to the outlook. It is the only major demand pillar in outright decline. Inbound visits fell roughly 5.5% to 68.3 million in 2025, and inbound spending declined about 2.4% to $175 billion, with Canada driving the weakness through a drop of more than 20% (11)(12). The softness has persisted into 2026, with year-to-date overseas arrivals down roughly 4.3% through April, and a full recovery to the 2019 level is not expected until 2029 (11)(12). Visa wait times approaching four months in key source markets, a strong dollar, and negative perceptions of U.S. travel policy compound the drag; advance bookings from Europe for the peak summer travel window were tracking down more than 15% (11). The implication for the regional map is direct: gateway markets most dependent on foreign visitation will continue to underperform the resilient resort and secondary-market segments. For a deeper treatment of how inbound softness flows through to specific cities, see MMCG's analysis of international arrivals and hotel market dynamics.

Air travel data corroborates the domestic strength. TSA passenger throughput rose about 1.6% year over year through the first two months of 2026, building on a 2025 that produced the single busiest screening day on record, and the major carriers added roughly 2.8% more domestic seat capacity into the second quarter (2). The 2026 events calendar adds a layer of compression on top of this base. The FIFA World Cup, running from June into July across eleven U.S. host markets, is expected to add only about 0.4% to full-year national RevPAR, a modest figure concentrated heavily in a handful of host cities, while America250 and a deep convention and concert slate provide additional localized lift (2). The lesson of the year is that events drive rate in specific markets on specific nights, but the national engine remains domestic leisure and the recovering group segment.

Investment Market: Transaction Volume, Cap Rates, and Pricing Dispersion

The hotel transaction market has regained meaningful momentum, though it remains a recovering market rather than a peak one. Full-year 2025 U.S. hotel transaction volume reached roughly $24 billion, up sharply from the 2023 trough, and the Americas region led global hotel investment with a gain of about 27% (8). The first quarter of 2026 carried that momentum forward, with volume up about 14.4% year over year to roughly $5.6 billion, even as activity remained well below the 2022 cyclical peak (8). Private equity, which JLL describes as back on the offense, accounted for about 34% of first-quarter volume, and the broader buyer pool remains dominated by private capital, with high-net-worth and family-office buyers a growing presence (1)(8).

Interactive Graph - RevPAR, ADR, and occupancy forecast path 2021 to 2030

What capital there is has flowed overwhelmingly toward luxury and trophy assets, and toward large single-asset deals. The defining transaction of the cycle was the roughly $1.1 billion sale of two Four Seasons resorts, in Orlando and Jackson Hole, by Host Hotels to a private investment vehicle (1)(8). The pattern repeated across the year: the JW Marriott Marco Island traded for about $835 million at more than $1 million per room, the JW Marriott Phoenix Desert Ridge for roughly $865 million, and the Four Seasons Jackson Hole at approximately $2.2 million per room (1)(8). JLL expects transactions above $250 million to increase significantly through 2026, a forecast already visible in the deal record (8).

Cap rates have plateaued near cyclical highs and may be beginning to compress at the top end. The MMCG database places the national market cap rate near 9.3%, with luxury and upper-upscale assets in the 7% to 8% range and gateway and resort trophies clearing below 7%, while upscale and upper-midscale product sits near 9.5% and the economy and midscale tiers trade at double-digit yields (1). Nearly half of the hotel investors CBRE surveyed believe cap rates are now past their peak and will decline over the coming months (5). MMCG's detailed treatment of this dispersion is available in its review of U.S. hotel cap rate trends. Pricing per room captures the bifurcation more vividly than any single statistic: economy assets change hands below $50,000 per room while trophy hotels clear above $1 million, against a national transaction average near $117,000 (1). Time on market has lengthened to roughly 9.6 months, and assets continue to clear at a meaningful discount to asking price, a reminder that price discovery for the broad middle of the market is still incomplete (1).

Exhibit 3: U.S. Hospitality Sales and Pricing Trends, 2016 to 2026 YTD

Year	Deals	Volume	Avg Price/Room	Market Price/Room	Avg Cap Rate
2016	3,056	$32.9B	$138,400	$143,600	9.1%
2019	3,403	$36.8B	$136,700	$153,400	9.4%
2021	4,739	$43.2B	$148,800	$133,500	9.6%
2022	5,553	$61.2B	$161,300	$138,200	9.2%
2023	3,410	$25.6B	$124,100	$151,900	9.4%
2024	3,055	$22.0B	$115,700	$172,900	9.2%
2025	3,684	$24.1B	$108,600	$180,200	9.1%
2026 YTD	1,345	$10.1B	$122,100	$181,100	8.7%

Source: MMCG database. Market price per room reflects estimated movement across all properties, not only transacted assets.

Capital Markets and Financing: Debt, Distress, and the SBA/USDA Channel

The financing landscape for hotels in 2026 is best described as broadly open but sharply bifurcated. After the Federal Reserve cut roughly 300 basis points beginning in late 2024 and then paused, hotel debt liquidity recovered substantially. Debt is available across the price spectrum for nearly any credible borrower, but the terms diverge dramatically by asset quality. CMBS lenders are quoting fixed rates in the 6.5% to 8.5% range at roughly 65% to 70% loan-to-value, life companies sit in the 6% to 7% range, and bridge and debt funds price anywhere from 8% to 15% (5). The cleanest read on the market is the spread in outcomes: top-quartile branded assets attract competitive five-year takeouts while comparable weaker assets cannot clear a quote from the same lender list.

Interactive Graph - hotel mortgage maturities by year and the refinancing cost gap

Behind that liquidity sits a formidable maturity wall. Roughly $48 billion of hotel CMBS comes due across 2025 and 2026, and the Mortgage Bankers Association reports that 30% of all hotel and motel mortgage balances mature in 2026, the highest share of any property type (17)(18). The arithmetic of refinancing is the central stress: a meaningful share of this debt was originated at rates of 3% to 4.5% and now confronts a cost of capital closer to 6.25% to 7%, a jump of roughly 40% (17). Distress has begun to surface in the data, with the lodging CMBS delinquency rate jumping 137 basis points in a single month to 7.31% in March 2026, the largest increase of any property type, and CRED iQ projecting overall CRE distress could approach 15% by year-end (17)(19). For now, however, the stress is being absorbed through extensions, modifications, and recapitalizations rather than forced selling. Marquee situations such as the roughly $725 million Hilton San Francisco Union Square receivership and the distressed sale of the Raleigh in Miami Beach have resolved through workouts rather than fire sales (5). Single-asset single-borrower CMBS issuance, meanwhile, has remained strong at roughly 78% of the market, and the securitization of the Marco Island loan signals healthy institutional appetite for trophy hotel debt (5).

For the large universe of smaller and rural hotel owners, the federal lending programs are the financing channel that matters most, and this is where market conditions intersect directly with the demand for independent feasibility analysis. Hotels are among the largest single recipients of SBA capital. In fiscal 2025, SBA 7(a) lending to hotels and motels totaled roughly $1.8 billion across 699 loans at an average size near $2.6 million, and the accommodation and food services sector took about 16.4% of all SBA dollars approved, the largest share of any sector (21). The economics are compelling because SBA programs reach 85% to 90% loan-to-value, well above the 65% to 75% typical of conventional and CMBS hotel debt, which is why small operators rely on them so heavily. The June 2025 revision to the SBA's standard operating procedures, SOP 50 10 8, tightened that channel, reinstating a 10% equity injection on changes of ownership, raising credit-score thresholds, and reinstating the franchise directory, changes likely to compress approval counts in the near term (21). The Asian American Hotel Owners Association, whose members own a reported 60% of U.S. hotels, has pressed Congress to raise the 7(a) and 504 loan caps from $5 million to $10 million in response to rising development costs (23).

In rural markets, the USDA Business and Industry program is the parallel tool, financing hotels in communities under 50,000 at up to $25 million per project with an 80% guarantee. A recent example is a roughly $21.5 million B&I-guaranteed loan announced in February 2026 to acquire and renovate the Shiloh Inn in Klamath Falls, Oregon (22). MMCG's primer on the USDA B&I program details the eligibility and structure in full.

What ties the financing thread together is the feasibility study. Hotels are special-purpose, operating-intensive real estate, and both the SBA standard operating procedures and the USDA rule at 7 CFR 5001.3 require an independent third-party feasibility study for new construction, change of ownership, or start-up projects (21)(22). That study is a distinct deliverable from the appraisal, and the distinction is the entire point. An appraisal answers what an asset is worth and supports the loan-to-value test; a feasibility study answers whether the project will actually generate enough cash to service its debt and supports the coverage test. A hotel can be comfortably over-collateralized on paper and still fail on a debt-service-coverage basis if the absorption curve disappoints, and that infeasibility is invisible from the appraisal alone. In a market defined by constrained supply, elevated costs, refinancing stress, and a wide gap between strong and weak submarkets, the demand assumptions inside a credible hotel feasibility study carry more weight than at any point in the cycle. MMCG prepares lender-grade studies for SBA, USDA B&I, and conventional hotel financing under USPAP discipline.

Exhibit 4: Full-Service Hotel Operating Profile, Per Available Room (2024)

Metric	Per Available Room	Share of Revenue
Total Revenue	$98,300	100%
Rooms Revenue	$61,300	62.4%
Food & Beverage Revenue	$28,300	28.8%
Gross Operating Profit	$32,900	33.5%
EBITDA	$23,600	24.0%
Total Labor Cost	$36,300	36.9%

Source: MMCG database. Property insurance rose roughly 10% and property taxes roughly 4.8% year over year, the leading drivers of margin compression.

Investment Opportunities: Conversions, Extended-Stay, and Resort and Leisure

The current environment, with its constrained pipeline, bifurcated performance, and incomplete price discovery in the middle of the market, creates several differentiated opportunities for investors with sector expertise and patient capital.

Conversions and repositioning are the cycle's most scalable play. With roughly a quarter of the hotel stock more than fifty years old, renovation costs running above pre-pandemic levels, and a maturity wall forcing decisions, an unusually large cohort of tired assets will trade at a basis well below replacement cost. The brands have already demonstrated the appetite, rebranding nearly 1,900 hotels in 2025, and the gap between the cost to convert an existing hotel and the cost to build a new one has rarely been wider (14)(15).

Extended-stay and premium select-service offer the most durable fundamentals. These formats combine the lowest development costs, the strongest operating margins, and the most resilient occupancy in the industry, with extended-stay demand still growing and occupancy running more than twelve points above the national average (16). They also represent roughly 70% of what is actually being built, a signal that the smart money in development is concentrated here (1).

Resort and luxury assets remain the rate story. High-income leisure demand has proven remarkably resilient, the luxury segment is forecast to lead RevPAR growth at roughly 5.3%, and the supply of genuine trophy product is structurally constrained by the difficulty of financing new luxury construction without a residential component (2). For investors who can compete on price, these assets offer pricing power that the broad market cannot.

Maturity-driven, mid-market distress is the entry point for opportunistic capital. The widest bid-ask spreads and the most motivated sellers are found among operator-distressed middle-market assets facing a refinancing they cannot complete at par. With an estimated 5% of the national hotel inventory potentially coming to market as rate cuts prompt sales, and substantial dry powder waiting, the opportunity is in the assets that institutional buyers are not yet chasing (5).

Risks and Uncertainties: Tariffs, Labor, Insurance, and the FIFA Question

Despite a constructive base case, several material risks warrant close monitoring, and most of them are interconnected.

International inbound is the swing variable. Foreign visitation is the only major demand pillar in decline, and the path of its recovery, currently not expected to reach 2019 levels until 2029, will largely determine whether gateway markets participate in the upturn (11)(12). A further deterioration tied to visa friction, currency, or geopolitics would pull the national RevPAR forecast back toward the early-year consensus of roughly 1%.

The macroeconomic and energy backdrop is fragile. U.S. GDP growth for 2026 has been downgraded to roughly 2.2%, inflation as measured by the PCE index is running near 3.5%, and the Federal Reserve has held its policy rate steady amid an energy-price shock driven by Middle East conflict (1). A K-shaped consumer, with vacation intent at a six-year low beneath a resilient top tier, leaves the breadth of demand exposed to any income shock (10).

Cost inflation is compressing margins from several directions at once. Labor remains the single largest expense line, property insurance premiums continue to escalate sharply in coastal and disaster-prone markets, and property taxes and tariff-affected construction and renovation costs add further pressure (6)(15). MMCG's case study on rising insurance costs in Tampa Bay illustrates how quickly these line items can impair coverage on a leveraged asset.

Refinancing stress will grind through 2026 and 2027. With 30% of hotel mortgage balances maturing in 2026 and a 40% jump in the cost of debt facing borrowers, the risk is a steady stream of recapitalizations and discounted sales, and potentially a shift toward forced selling if special-servicing rates break decisively above their late-2025 peak (17)(18).

Event-driven demand may disappoint where it was most hyped. The FIFA World Cup is the clearest cautionary tale. Despite early projections likening it to a series of Super Bowls, nearly 80% of host-city hotels reported bookings tracking below forecast, and FIFA released up to 70% of its reserved room blocks before the tournament, leaving the national RevPAR lift modest and concentrated (6). The episode is a useful reminder for any projection: pricing to hype rather than to demonstrated demand is its own risk.

Strategic Implications and Five-Year Outlook

The U.S. hospitality market stands at the threshold of a measured, uneven recovery rather than a rapid reopening. The supply correction now underway will shape the competitive landscape for years, creating durable pricing power for well-located existing assets and a narrowing window of opportunity for low-cost new development. Our analysis yields several strategic conclusions.

Performance will improve gradually, led by rate. After the historic 2025 decline, the MMCG database and the consensus of independent forecasters point to RevPAR growth in the range of roughly 2% to 3% in 2026, settling toward a steady 2% annual pace through 2030, with occupancy holding near 62% to 63% and ADR doing the work (1)(2)(4)(5). The recovery will be led by the high end and by markets with constrained supply, and it will lag in inbound-dependent gateways until foreign visitation recovers.

Supply scarcity is the most reliable tailwind in the market. With net supply growth near 0.4% and a pipeline stalled at the planning stage, existing full-service, upscale, and luxury assets should enjoy pricing power through at least 2027 (2). For developers, the dramatic decline in starts positions low-cost extended-stay and select-service product, in supply-constrained submarkets, as the most defensible new development.

Capital will favor quality and patience. Trophy assets are likely to see continued cap-rate compression as institutional capital competes for a scarce set of properties, while the genuine value lies in maturity-driven mid-market distress, where the bid-ask spread is widest. The maturity wall will resolve mostly through workouts, producing a steady flow of opportunity rather than a single dislocation (17)(19).

Demand rests on a domestic anchor, with two swing variables. Domestic leisure and a recovering group segment provide the base, international inbound is the key downside risk and potential upside surprise, and the events calendar offers optionality rather than a reliable windfall (11)(12).

The feasibility imperative has rarely been stronger. In a market this bifurcated, this cost-pressured, and this dependent on projections rather than comparables, the discipline of an independent feasibility study is what separates a financeable hotel from a stranded one.

For lenders, CDCs, and investors, the imperative is conservative leverage, granular submarket selection, and a willingness to underwrite to normalized rather than trough or peak conditions. The asset class rewards specificity, and specificity is exactly what a credible market study delivers.

June 9, 2026, by Michal Mohelsky, J.D. Principal of MMCG Invest, LLC, feasibility study company. Interested in discussing market conditions for your hotel or hospitality project? Book a meeting with MMCG.

Reach out to discuss how our methodology supports your lending or development decision.

Michal Mohelsky, J.D. | Principal | mmcginvest.com 

Contact: michal@mmcginvest.com

Phone: (628) 225-1125

About MMCG

MMCG Invest, LLC is a national commercial real estate feasibility consulting firm specializing in SBA and USDA feasibility studies across asset classes including hotels and hospitality, multifamily, RV parks, gas stations, and assisted living. Our analyses serve lenders, CDCs, investors, and developers seeking institutional-quality market intelligence for underwriting and investment decisions. Practicing Affiliate of the Appraisal Institute. Studies prepared under USPAP discipline.

Disclaimer: This report is provided for informational purposes only and does not constitute investment advice. Data presented herein is derived from proprietary MMCG databases and third-party sources believed to be reliable; however, MMCG Invest makes no representation as to the accuracy or completeness of such information. Figures from third-party industry databases have been independently verified and, where appropriate, adjusted to reflect MMCG's proprietary analytical methodology. Past performance is not indicative of future results.

Sources

(1) MMCG database; based on MMCG research.

(2) CoStar and Tourism Economics, U.S. Hotel Forecast releases, January and June 2026; STR, U.S. hotel performance data.

(3) STR / CoStar, monthly and full-year U.S. hotel performance, 2025.

(4) PwC, US Hospitality Directions, December 2025 edition.

(5) CBRE Hotels Research, Hotel Horizons and Q1 2026 U.S. Hotel Figures; CBRE H2 2025 U.S. Cap Rate Survey.

(6) American Hotel & Lodging Association (AHLA), 2026 State of the Industry Report and FIFA World Cup 2026 Hotel Outlook.

(7) Fitch Ratings, Global Lodging Outlook 2026, January 2026.

(8) JLL, 2026 Global Hotel Investment Outlook and 2025 U.S. Hotel Investment Trends Report.

(9) Marcus & Millichap, 2026 Hospitality Outlook.

(10) Deloitte, 2026 Travel Industry Outlook and Summer Travel Survey.

(11) U.S. Travel Association and Tourism Economics, U.S. Travel Forecast, Spring 2026.

(12) U.S. National Travel and Tourism Office (NTTO), International Visitor Arrivals data, 2026. (13) Global Business Travel Association (GBTA), Business Travel Index Outlook and 2026 sentiment polls.

(14) Lodging Econometrics, U.S. Construction Pipeline Trend Report, Q4 2025. (15) HVS, U.S. Hotel Development Cost Survey 2025; Turner Construction Cost Index.

(16) The Highland Group, Report on the U.S. Extended-Stay Hotel Market 2026.

(17) Trepp, CMBS Delinquency and Special Servicing Reports, 2026; Matthews Real Estate Investment Services, 2026 Hospitality Outlook.

(18) Mortgage Bankers Association, Commercial Real Estate Survey of Loan Maturity Volumes, February 2026.

(19) CRED iQ, Commercial Real Estate Distress Report, 2026.

(20) Morningstar, 2026 Commercial Real Estate and CMBS Outlook.

(21) U.S. Small Business Administration, 7(a) and 504 program data and SOP 50 10 8.

(22) U.S. Department of Agriculture Rural Development, Business & Industry Guaranteed Loan Program.

(23) Asian American Hotel Owners Association (AAHOA) and Oxford Economics, economic impact study.

(24) IBISWorld, Hotels & Motels in the U.S. industry report.

(25) Oxford Economics, U.S. macroeconomic and demographic data.