CoStar: Luxury Travelers Show No Pushback on Higher Hotel Rates
Skift Take
CoStar expects demand growth to continue across all price points, with luxury outperforming and the high-end customer showing no pushback on higher ADRs. Plus, more hotel deal and development news.
JP Morgan hosted a webinar with Jan Freitag, CoStar's National Director for Hospitality Market Analytics, to review the firm’s updated U.S. lodging outlook. Freitag said its higher 2026 RevPAR forecast of +2.8% could wind up being conservative given recent trends. Even with easier RevPAR comparisons, its RevPAR forecast is just +1.8% in the second half of 2026 versus +3.9% in the first half of 2026. It expects demand growth to continue across all price points, with luxury outperforming and the high-end customer showing no pushback on higher ADRs. YTD occupancy gains from midscale through upper-upscale are laying the groundwork for positive ADR growth as the year progresses. U.S. hotel supply will remain constrained as elevated interest rates continue to slow domestic pipeline growth. The luxury traveler's willingness to spend on lodging is unwavering, reflecting the cohort's exposure to equities and real estate, combined with a sustained preference for experiences over goods.
