NASHVILLE — Hotel performance has continued to exceed expectations in 2026, but industry leaders say the combination of shifting traveler behavior, economic uncertainty and evolving demand patterns is making forecasting more challenging than ever.
During a panel discussion moderated by STR President Amanda Hite at the Hotel Data Conference, held here earlier this month, executives from management companies and ownership groups shared their perspectives on performance trends, customer segments and the demand drivers shaping the hotel industry's outlook.
While participants generally agreed with industry forecasts presented earlier in the conference, they also acknowledged that several key trends have surprised operators during the year. "We certainly underestimated the demand and the [revenue per available room] growth that we've seen thus far this year," said Brian Berry, chief commercial officer at Pyramid Global Hospitality.
Berry noted that many operators expected World Cup-related demand to provide a boost, but were surprised by the strength of performance in markets that were not directly tied to tournament activity. "Some of the strongest occupancy-growth markets were not World Cup markets," he said, pointing to unexpected demand growth that emerged early in the year.
Lifestyle Outperforms
For operators with significant lifestyle hotel exposure, performance has been particularly strong.
Coury Hospitality CEO and founder Paul Coury, whose company operates approximately 50 hotels and 75 food-and-beverage outlets, said lifestyle properties account for about 80 percent of his portfolio and have been generating growth well above other segments. "What stands out is that the U.S. economy is incredibly resilient," Coury said. "We've had every curveball thrown at us for the last two years."
According to Coury, lifestyle hotels are averaging close to 10 percent growth, compared with roughly 4 percent growth across other property types. Spending per occupied room also continues to increase, providing an additional boost to profitability.
He attributed much of that performance to travelers' growing preference for experiences and destination-driven stays. "The baby boomers definitely are driving that, and people that are chasing experiential properties," Coury said.
Experiences Become a Big Differentiator
Panelists repeatedly returned to a common theme: travelers increasingly want more from hotels than accommodations alone.
Coury argued that hotels must continue to invest in programming, food-and-beverage offerings and on-property experiences if they expect travelers to keep accepting higher room rates. "If I could develop every hotel or design every hotel, I would have multiple F&B outlets," he said. "I would have activation. I would have things that, when you come stay with us, cause you to stay on the property more, spend a little bit more money there and come back and stay with us."
The pressure to deliver value becomes even more important as hotel prices rise. "It's expensive now to travel," Coury said. "At some point people are going to say, 'I'm not paying $1,000 this weekend to stay.'"
For now, however, consumers have largely continued to absorb those price increases.
The challenge for operators, he said, is ensuring the guest experience continues to justify the cost. "It's got to provide something more than just a bed," Coury said.
Momentum Gains
While leisure travel has been a primary demand driver in recent years, panelists said business travel and group demand continue to show encouraging signs.
Chris Dickinson, divisional vice president of revenue strategy for Aimbridge Hospitality's select-service division, said business-transient demand remains on a positive trajectory despite lingering questions about its long-term recovery.
"I think the recovery of business travel is still a little bit of a question mark, but it's growing all the time," Dickinson said, adding that operators are increasingly leveraging strong demand to improve business mix, replacing discounted segments with higher-rated group business and retail demand.
Berry echoed that assessment, noting that group lead volume within Pyramid's portfolio is up double digits year over year. "We're seeing some really good strength across corporate travel, whether that's individual business travel or group," he said.
Those forward-looking indicators continue to provide confidence about near-term demand trends, even amid broader economic uncertainty.
Leisure and Event Demand
Despite strong overall industry performance, panelists pointed to leisure travel as the segment that could face the greatest pressure going forward. Berry said his company has started to see signs of slowing growth in leisure demand, particularly during weekends.
Looking at recent industry performance data, weekend occupancy growth has begun to trail weekday occupancy growth, although both remain positive.
Operators are closely monitoring consumer confidence, inflation, gasoline prices and labor market conditions for signs that discretionary travel spending could slow. "I don't think it's going to turn south," Berry said. "But it's certainly not going to have the same rate of growth that we're seeing across other segments."
Large events remain one of the industry's most important demand catalysts. Dickinson said hotels continue to closely monitor convention calendars, while also recognizing that major events can create meaningful demand beyond the host destination itself.
Using Miami's World Cup matches as an example, he pointed to demand spillover that benefited nearby markets including Fort Lauderdale, Orlando and Florida's Space Coast.
Panelists also highlighted concerts as increasingly powerful demand generators. Berry cited tour schedules featuring major music acts as examples of events that now drive substantial hotel demand and compression across multiple markets. Travelers are increasingly willing to travel significant distances for entertainment experiences, creating opportunities for hotels to capture room nights and ancillary spending.
At the same time, operators continue to depend on conventions and citywide events, although Berry noted that many hotels require increasingly larger conventions to generate meaningful compression benefits.
As operators look ahead to 2027, panelists agreed that demand growth remains the most reliable predictor of future rate performance. "Rate follows demand," Berry said.
Yet understanding the factors driving demand has become more complicated. Traditional economic indicators do not always align with hotel performance, and emerging factors such as AI-related investment spending have further clouded forecasting models. But as economic conditions evolve and traveler preferences shift, operators say flexibility and a strong understanding of local demand drivers will be more important than ever.