The hospitality market performed better than expected in the first half of 2026, with revenue per available room (RevPAR) growing at 4.8%, according to a report from Cushman & Wakefield.

Growth in RevPAR — a key performance metric in the hotel sector — accelerated in the second quarter, with gains of 4.5% in April, 4.0% in May and a whopping 8.4% in June. Initial forecasts for 2026 from the travel analytics companies STR and Tourism Economics called for RevPAR to rise by an anemic 0.6% for the year, following a disappointing 0.2% decline in 2025. Updated forecasts now estimate RevPAR to jump a healthy 2.8% for all of 2026, and even that figure may prove conservative.

Stronger leisure and business travel, a shift toward luxury hotels and major sporting events all helped boost hotel business across the country. Occupancy rates reached 66.7% in the second quarter, up 1.3% from a year ago. The average RevPAR rate averaged $113, a 5.7% increase from a year ago.

Advertisement

The gains were driven primarily by increases in the average daily rate (ADR), which rose 3.5% year-to-date and grew to 6.7% in June. Occupancy rates also rose by 1.3% in the second quarter. Market supply increase by 0.4% year over year, while demand grew at 1.7% from last year.

A major boost for the hotel industry came from the 2026 FIFA World Cup. Initial reports following the global sporting event suggested that its impact on the hospitality impact was more subdued than expected as hotel room demand in some cities hosting tournament games was not as robust as initially anticipated.

That turned out not to be the case. The event was “a significant demand driver,” according to Cushman & Wakefield, and generated outsized gains in various host markets. During the week ending June 27, for instance, RevPAR surged 51.6% in Miami and 40.7% in San Francisco as the soccer matches increased demand.

Luxury hotels led all segments in the hospitality sector, posting a RevPAR growth rate of 8.8% and an ADR jump of 6.5%. Growth moderated down the strata of hotel types, with hotels ranked upper upscale, upscale and upper midscale seeing RevPAR increases from 3.9% to 4.8%. Economy hotels were the only hotel category in negative RevPAR territory for the year so far, but they did see RevPAR performance increase by 2.3% in June.  

“The hotel industry sold a record number of room nights in the first half of the year, an increase of 11.4 million compared with 2025, while room revenue climbed by more than $5.4 billion,” STR President Amanda Hite said during the August Hotel Data Conference in Nashville. “The industry outperformed our expectations on stronger leisure and business travel, fueled in part by the World Cup and America 250 celebrations. In the next six months, we expect slightly lower gains than in the first half of the year, but top-line growth will still be driven by ADR. We also expect to see a stronger 2027 than what we initially projected in our past forecasts, although there will be some mid-year weakness due to difficult year-over-year comparisons.”