HotelData report: Hotel profits climb, but growth remains uneven

Hotel profitability improved during the first half of 2026, driven by stronger room rates and revenue growth, according to the latest report from HotelData.com. Across a sample of roughly 5,000 U.S. hotels, gross operating profit margin increased 3.6 percentage points year over year to 44.9 percent, while RevPAR rose 8.9 percent to $144.01 and total revenue per available room increased 9.2 percent to $189.30. 

h1 profitability table

This is also reflected in CoStar and Tourism Economics raising the forecasts for both 2026 and 2027 after stronger-than-expected demand and pricing performance through the year's first seven months.

The results, however, highlighted a widening divide across chain scales, with luxury hotels significantly outperforming economy properties.

Among the report's key findings:

• GOP margin rose 3.6 percentage points year over year to 44.9 percent in the first half and reached 47.2 percent in the second quarter.
• Luxury hotels posted the strongest gains, with ADR up 10.1 percent, RevPAR up 15.9 percent and GOP margin up 4 percentage points.
• Economy hotels were the only segment to post a RevPAR decline, down 2.7 percent, despite recording the strongest occupancy growth.
• June delivered the strongest monthly pricing environment, with ADR increasing 11.4 percent and RevPAR rising 13.1 percent.

chain scale table

Luxury hotels benefited from both higher rates and stronger occupancy, with ADR climbing 10.1 percent and occupancy increasing 3.4 percentage points. Those gains pushed RevPAR up 15.9 percent to $225.27, while GOP margin improved from 34.6 percent to 38.6 percent.

Economy hotels told a different story. While occupancy increased 4.6 percentage points, ADR fell 9.3 percent, resulting in a 2.7 percent decline in RevPAR. GOP margin was largely unchanged, slipping just 0.1 percentage points. The findings suggest that stronger demand alone was not enough to offset rate pressure and drive meaningful profit growth.

GOP h1 line chart

The middle segments posted more balanced results, perhaps reflecting the C-shaped economy Hilton's Christopher Nassetta has been declaring. Midscale, upper-midscale, upscale and upper-upscale hotels all recorded RevPAR gains, while upper-upscale properties delivered one of the strongest margin improvements despite more modest top-line growth.

Second-quarter performance reinforced the first-half trend. Across all hotels, ADR increased 8 percent and RevPAR rose 9.4 percent, while GOP margin improved 3.3 percentage points to 47.2 percent. Economy hotels, which experienced an 8.9 percent RevPAR decline in the first quarter, returned to growth in the second quarter with RevPAR increasing 3.3 percent.

chain scale june table

June was the strongest month for pricing performance, coinciding with the start of the FIFA World Cup. ADR rose 11.4 percent across all hotels, while RevPAR increased 13.1 percent. Luxury hotels saw June ADR climb 20.6 percent and RevPAR increase by roughly 24 percent.

"The H1 data shows a market that's getting stronger in aggregate, but the divide between the top and bottom of the chain scale continues," Sarah McCay Tams, head of research and editorial at Actabl, said in a statement. "Hotel leaders should think about this bifurcation less as a demand divide and more as a pricing-power divide. The second half of the year will test how durable that pricing power is and how much operational discipline can do to protect the margins that remain."