Hotel Rates 2027: Latin America Surges, U.S. Gains Stay Modest

Hotel rates keep rising in 2027, but the climb is uneven

Travelers and companies hoping hotel prices would finally level off in 2027 will be disappointed. Increases are still coming, though they are getting smaller and more uneven from city to city. American Express Global Business Travel's Hotel Monitor 2027, released in late September, expects global hotel rates to keep climbing next year. It credits steady corporate travel and meetings demand in the Americas and Europe, along with persistent inflation, while forecasting smaller gains in Asia-Pacific and continued weakness in the Gulf.1623

The city figures are spread wide. São Paulo leads the cities tracked with a projected increase of 10.9% to 12.2%. Buenos Aires follows at 8.1% to 8.7%, Madrid at 6.1% to 9.2% and Mexico City at 4.7% to 7.1%.2324 London is forecast at 3.6% to 5.4% and Paris at 3.1% to 4.8%. New York gets only 1.6% to 2.5%, and Toronto 0.5% to 1.9%.2627 At the bottom of the table, Dubai is expected to rise just 1% to 2% after the Middle East conflict pushed UAE hotel occupancy as low as 19.6% in March. Occupancy has since recovered to roughly 40% to 50%.2129

The forecast comes as a range rather than a single number for each city, which Amex GBT has never done before. The company points to geopolitical uncertainty and volatile commodity prices.2328 Its guidance is that buyers should plan around the low end if the Middle East conflict drags on or if global inflation tracks the IMF's July projection of 4.7% for 2026. If inflation runs hotter, the high end becomes more likely.1630 The ranges matter in themselves: they show how much the outlook still depends on the oil price shock that dominated travel in 2026.

North America sits at the slow end

For U.S. travelers the headline is restraint. Most North American markets are forecast to rise less than 3%.25 Los Angeles is projected at 1.3% to 2.3%, Chicago at 1.5% to 2.7%, Washington at 1.3% to 2%, and Boston at 0.5% to 1.5%. Seattle is close to flat, at 0% to 0.8%.22 San Francisco is the main exception at 3.6% to 5.4%, and Amex GBT names it a regional "hotspot" alongside Mexico City.25 Canada's major cities all fall below 3%, which the report puts down to healthy hotel inventory and steady demand.28

Coverage of this section splits on what the numbers mean. Business Travel News reports Amex GBT's view that construction in most U.S. markets is keeping supply in step with demand, which is why rates are only creeping up.25 Asian Hospitality reads San Francisco the other way. Drawing on JLL research, it treats the city as a sign that tight construction pipelines are handing pricing power to existing hotels, and it argues that owners will have the edge in 2027 negotiations.22 Both readings can hold at once, but the data favors the first. Supply-constrained markets may push harder, while the national picture is mostly modest growth.

The main U.S. industry forecasters agree. CoStar and Tourism Economics expect U.S. average daily rate (ADR) to grow 1.6% in 2027, with demand up 1.1% and revenue per available room (RevPAR) up 2.1%.58 Their own inflation assumption for 2027 is 2.3%, so U.S. room rates would fall slightly in real terms.520 CoStar had already said earlier in the year that rate growth would stay below inflation.4

Why 2027 looks slower than 2026

The slowdown makes more sense against an unusually strong 2026. U.S. hotels sold a record number of room nights in the first half of the year, 11.4 million more than in the same period of 2025, and room revenue rose by more than $5.4 billion.36 CoStar and Tourism Economics raised their full-year 2026 forecast to 4.4% RevPAR growth and 3.1% ADR growth, crediting stronger leisure and business travel and help from the FIFA World Cup and America 250 celebrations.7

That strength makes next summer harder to compare. CoStar's assumptions show U.S. ADR growth would be 2.1% in 2027 without June and July, the months that will be measured against the World Cup peak.5 STR president Amanda Hite has warned of some mid-year weakness for that reason.3 A soft summer 2027 will therefore partly reflect the comparison with 2026, and should not be read as falling demand.

GBTA and travel management company Altour see the same pattern globally. They forecast global hotel ADR rising 3.7% to $168 in 2026, then 1.8% to $171 in 2027. They say a record global construction pipeline is helping hold rates down even with strong demand.1418 Amex GBT describes rates "continuing to rise," while GBTA describes "relief." Both are describing the same slowdown, and the difference is mostly framing.

Airfares are the bigger budget problem

Rising airfares are putting more pressure on travel budgets than hotel rates are. Amex GBT says airfares were up 15% year-on-year globally in mid-2026, and up as much as 30% on some Asia routes.2426 U.S. consumer data shows sharper increases. The U.S. Travel Association's Travel Price Index put airline tickets 26.5% higher in June than a year earlier.31 The Bureau of Labor Statistics found April fares 21% above the prior year.35 Domestic round trips averaged $623 in April, the highest in nearly four years, according to the Airlines Reporting Corporation.37

The main cause is fuel. The conflict involving Iran and the disruption around the Strait of Hormuz roughly doubled jet fuel prices within months.37 By mid-July, IATA's global average had reached $149.40 a barrel, and analysts quoted by Forbes expected further fare increases into autumn.31 Airlines also cut capacity, and Spirit Airlines shut down, removing a major low-fare competitor from routes to Florida, the Caribbean and Las Vegas.3337

The outlook for airfares is less settled than the hotel outlook. Some coverage in late June expected fares to stay high even after a U.S.-Iran agreement brought oil prices down, because demand and limited capacity would keep them elevated.38 A month later, Forbes reported that the ceasefire had broken down and fuel was rising again.31 GBTA expects relief in 2027, with blended global airfare growth slowing from 4.7% in 2026 to 1.5%. It still warns that prices are unlikely to return to 2025 levels, citing aircraft delivery delays, sustainable aviation fuel requirements and labor shortages.1217

The two cost pressures are pushing behavior in different directions. GBTA's data shows business travelers moving down to cheaper cabins as fares rise.17 Amex GBT, by contrast, finds that corporate travelers in Asia-Pacific have not responded to higher airfares by booking lower-tier hotels.2529 That suggests companies are protecting hotel standards and finding savings on flights.

Consumers are splitting by income

Leisure travel spending has divided along income lines, much as corporate spending has divided by region. Bank of America Institute research found lower-income households were more than twice as likely as wealthier ones to skip a summer trip. About 38% of them reported no summer travel plans.35 CoStar reports that households earning $200,000 or more make up 11% of households but account for 25% of travel spending. Luxury hotels are on track for 5.9% ADR growth in 2026.5

Tourism Economics still expects travel to grow into 2027. It cites stable labor markets, recent gains in household wealth and easing inflation as reasons consumer spending should hold up, with group travel continuing to recover.710 Fewer Americans traveling abroad is also helping U.S. hotels, as more people vacation at home. International arrivals remain unpredictable: U.S. inbound traffic was roughly flat in June despite the World Cup.5

The bottom line

All the major forecasts point the same way: hotel rates rise in 2027, but more slowly than in 2026, and how much travelers pay will depend on where they go. U.S. travelers should expect small hotel increases, likely below inflation in most cities, and continued volatility in airfares tied to fuel. Companies sending staff to São Paulo, Madrid or Mexico City face much steeper hotel costs. In the Gulf, hotels are trying to win visitors back, so buyers have room to negotiate.2526

For hotel owners, higher revenue does not mean higher profits. STR expects operating expenses to grow faster than inflation in both 2026 and 2027. Adjusted for inflation, profit per available room is forecast to stay below its 2019 level through 2027.8 Hotels and corporate buyers are both adopting AI tools for pricing and sourcing, and Amex GBT says rate negotiation is shifting from a once-a-year exercise toward a continuous process.2327 With smaller rate increases, both sides have less margin for error, and hotels will be trying to set the right price for each date rather than raise rates across the board.