STR predicts rate-led RevPAR growth

STR and Tourism Economics are telling hotel operators that the next leg of revenue growth will come less from filling more rooms and more from charging more for them. Their latest third-quarter 2026 outlook says revenue per available room, or RevPAR, is expected to lean more heavily on average daily rate, or ADR, as many markets run into limits on further occupancy gains. CoStar’s global forecast note, published this week, said Europe’s 2026 RevPAR growth is expected to be driven predominantly by ADR, while Asia-Pacific, the Middle East and Africa are forecast to lead growth across the covered regions. ### Why are forecasters saying occupancy matters less right now? CoStar’s global hotel market forecast assumptions said short-term occupancy upside is constrained in several regions by supply additions and already-high room fill levels, particularly in Europe. That leaves ADR doing more of the work in RevPAR growth, because RevPAR is the product of occupancy and room rate. (costar.com) The August 6 U.S. forecast from CoStar and Tourism Economics showed the same pattern. The firms raised their full-year 2026 U.S. RevPAR growth projection to 4.4%, with demand growth of 1.7% and ADR growth of 3.1%, after stronger-than-expected first-half performance. For 2027, they said ADR would remain the primary driver of RevPAR growth even as overall growth moderates. (costar.com) ### Which regions are expected to lead the next phase of growth? Asia-Pacific, the Middle East and Africa are expected to lead RevPAR growth in the latest global outlook, according to CoStar’s forecast assumptions for Q3 2026. Europe remains positive, but the published assumptions point to slower gains there, with 2026 RevPAR forecast to grow 1.2% year over year across STR’s 31 European forecast markets and ADR contributing 0.8 percentage points of that increase. (costar.com) Tourism Economics says its lodging forecasts track supply, demand, occupancy, ADR and RevPAR across markets and are designed to show what is driving performance rather than only where topline growth lands. That framework matters in a period when the same RevPAR result can come from either fuller hotels or higher prices. ### What does a rate-led RevPAR forecast change inside a hotel? (costar.com) Revenue teams, reservation staff and front-office managers become more exposed when ADR is carrying more of the growth target. A hotel that is already running high occupancy has less room to improve by selling the last few rooms, so pricing discipline, length-of-stay controls, room-type upsells and segment mix matter more to the outcome. CoStar’s U.S. forecast gives one example of how that differs by chain scale. (tourismeconomics.com) Luxury chains are forecast for double-digit RevPAR growth in both Q2 and Q3 2026, lifting full-year ADR growth to 5.9%, while midscale and economy RevPAR growth comes primarily from demand growth. That means the commercial playbook is not the same for every property type. ### Does this mean demand is weakening? The August 6 U.S. note said strong demand observed in the first quarter continued through the second quarter of 2026, and that record first-half room-night sales helped justify the higher forecast. The issue is not that demand has disappeared. The issue is that in many markets, occupancy is closer to its practical ceiling, while pricing still has room to move. (costar.com) Hotel Dive reported earlier this year that CoStar and Tourism Economics’ initial 2026 U.S. forecast also expected ADR gains to outpace occupancy changes. That earlier view has since been revised up, but the direction of travel stayed the same: room rates were expected to do more of the lifting than volume. (costar.com) ### Where can operators watch the forecast change next? CoStar publishes updated U.S. and global hotel forecast assumptions on its STR benchmark data-insights pages, and Tourism Economics lists its lodging and visitor forecast products on its research site. The August 6 U.S. assumptions and the global Q3 2026 assumptions published this week are the current reference points for 2026 and 2027 occupancy, ADR and RevPAR. (hoteldive.com) (costar.com)