Is the U.S. hotel industry expected to grow in 2026?

Yes, but barely. Forecasts point to occupancy in the 62 to 64 percent range, ADR growth around 1 to 3 percent, and RevPAR growth near flat. In other words, the market is moving, but it is not exactly sprinting.

What segments will drive hotel demand in 2026?

Corporate transient and small group travel are gaining strength again. Leisure demand is still there, but it is no longer powering the entire market. International inbound remains weaker than pre-pandemic levels, which impacts major cities.

How should hotels approach pricing if ADR growth is slowing?

Hotels should focus on precision instead of pressure. Rate increases will be more selective. Balance becomes the real superpower. You want pricing that optimizes both occupancy and rate, not pricing that pushes one at the expense of the other.

What traveler behaviors should revenue teams watch?

Revenue teams should watch for later booking windows, stronger demand for personalization, and more value-driven decision making. Guests will still spend, but they want to feel confident about where their money is going. Experience and clarity matter.

Can AI really help with revenue strategy in a slower market?

Absolutely. When the market is calm, good revenue managers do fine. When the market tightens, the ones with true demand intelligence pull ahead. AI helps you forecast more accurately, react faster to changes in pickup, and find the rate and occupancy balance that maximizes revenue.

Do I need to change my hotel pricing strategy for 2026?

If your current strategy depends on strong across-the-board rate growth or predictable leisure demand, yes. If your strategy is built on segmentation, local market awareness, and agile pricing, you are already headed in the right direction.

Article
01.08.26

Booking Insights: December 2025 Wrap Up and Early 2026 Read

TL;DR: Booking Insights for December 2025 and January 2026

December ended softer than last year on average. Occupancy finished at 27.3%, down from 31.8% last year, and ADR averaged about $234, roughly 7.5% lower.
January is pacing behind last year early, with occupancy around 12.9% vs 14.8% and ADR down about 12.4%.
Traveler behavior continues to shift, booking closer in and showing clear price sensitivity.

December 2025: Not the Holiday Boost Operators Hoped For

December closed with lower occupancy and softer rates compared to last year. That combination made year-end feel more challenging than operators were expecting.

Here’s the real story:

Holiday travel this year was more selective. Guests shortened stays, delayed planning, or opted for lower-priced options.
Travel did happen, but it didn’t show up in the early pacing numbers or across every night.
Properties that stayed flexible on pricing and leaned into late holiday and weekend demand captured more of the booking pickup that did materialize.

This wasn’t a property-specific performance issue — it looked a lot like the broader industry trend of tighter holiday budgets and more deliberate booking behavior.

January: Early Pacing Is Soft, But That’s Still Normal

At this point in the calendar, occupancy and ADR both sit behind last year:

January occupancy is about 12.9% compared to 14.8% last year.
ADR is down roughly 12.4%, signaling higher price sensitivity among winter travelers.

If that sounds disappointing, it shouldn’t — January historically books very late, especially at independent and leisure-oriented properties. Guests lock in plans after holiday travel, weather, airfare trends, and short-term availability become clearer.

That means there’s still runway for meaningful pickup as we move closer to stay dates.

What We’re Seeing Across Demand Patterns

There are four themes emerging we think every revenue strategist should be watching:

1. Booking Windows Have Really Compressed

Travelers are committing later. Forward pacing can look soft for months, even when the demand is still real — it just shows up closer to stay dates.

2. Price Sensitivity Is Elevated

Guests aren’t just waiting — they’re comparing options more than ever. Value perception plays a bigger role in booking decisions, especially midweek.

3. Holiday and Winter Travel Softness Was Broad, Not Isolated

December’s softness wasn’t a one-off. The way travelers planned this holiday season reflected broader patterns we’ve been tracking: shorter stays, delayed bookings, and more selective trips.

4. Behavior Is Splitting (A K-Shaped Pattern)

We’re seeing two distinct traveler groups:

Premium demand still exists. Higher income travelers are booking premium nights and top locations even with shorter planning cycles.
Value-focused travelers are still traveling. But they are trading down in rate, shortening stays, and waiting longer to commit — often until deals or value clarity emerge.

This split makes early pacing numbers look softer, even when trips are happening — they’re just concentrated at the top end and the value end, squeezing the middle.

What This Means for Rate Strategy Right Now

Here’s the practical takeaway for January:

January still builds — but it builds late.

Most leisure demand won’t show up until closer to arrival. That means:

Flexibility wins. Properties that maintain dynamic pricing room — especially midweek — are better positioned to capture last-minute pickup.
Value clarity is critical. Guests are weighing what they get, not just what they pay. Think about how your pricing and packaging tells a clear value story.
Avoid early deep cuts. Heavy discounting too far out rarely captures the late booking loops we’re tracking. Protect your weekend nights, especially when premium demand signals pop.

This isn’t a market where early numbers are predictive. It’s a market where real-time demand signals, quick rate responsiveness, and value positioning determine who wins the business as it actually shows up.

Bottom Line

Travel hasn’t disappeared. It’s just behaving differently:

It’s booking later.
It’s more price conscious.
And it’s bifurcated between premium and value-driven segments.

If your strategy leans into that reality — not just last year’s patterns — you’ll capture more of the demand that’s actually out there.

As always, keeping a flexible approach to pricing and demand will be the difference between early softness and strong closes. Ready for the next few weeks? So are we.

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