Hotels' 2027 Math

U.S. hotel revenue will likely keep growing in 2027. Profits may fall. 

Before the pandemic, corporate travel anchored demand, so hotels tracked the economy. That link broke after 2020. Vacationgoers now drive demand, changing how you forecast.

Corporate transient demand remains roughly 10% below 2019 levels. Quick business trips are harder to justify when clients aren't in the office as much. Office attendance is stuck near half of pre-pandemic norms.

Leisure filled the gap, heading toward about 115% of 2019 demand, according to Ryan Meliker of Lodging Analytics Research & Consulting (LARC).

Vacationgoers run more on animal spirits than on GDP, Meliker said: stock market wealth, tax relief, and confidence.

Leisure also skews affluent. The wealthiest households now account for a larger share of travel spending.

With the U.S. receiving fewer foreign visitors, domestic leisure powered 2026. Revenue per available room (RevPAR) is on track to rise 4.4%, according to CoStar.

2027 looks harder. Leisure travelers may turn cautious. Employers are neither hiring nor firing. Excluding health care, the U.S. has added fewer than 100,000 jobs this year, while jobless claims fell for a fifth straight week. 

Corporate travel is also at risk. The 10-year Treasury yield hit 5.28% on Thursday, its highest since 2002. Corporate profit growth may slow from 14% this year to 6% next year, according to Moody's.

LARC forecasts RevPAR growth of only about 2.1% next year.

Weak revenue growth leaves margins exposed. This year, rising demand had boosted hotel bottom lines 3.6%, Actabl found. 

But wages, property taxes, insurance, and input costs (pushed up by uncertainty around fuel prices and tariffs) are all rising, as Skift has reported.

Hotel EBITDA may swing from 7.7% growth in 2026 to a 0.6% decline in 2027, according to LARC's forecast. Hotel owners already in a profit squeeze may stay in one.

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