US Hotel Rates Hit Record $179 as Airfares Climb 22% in 2026

A record night's stay

A hotel room in the United States now costs more than it ever has. US hotel rates reached an all-time high of $179.43 per night at the end of September, just as tens of millions of Americans start booking holiday trips.21 CoStar's weekly figures show where that came from: for the week of Sept. 13–19, the average daily rate (ADR) rose 5.7% from a year earlier to $179.30. That is the highest nominal weekly ADR on record in the country. Revenue per available room (RevPAR), which combines rate and occupancy, jumped 10.4%.28 The pressure carried into October. For the week of Sept. 27–Oct. 3, the national ADR was $172.38, up 7%, and RevPAR rose 12.9%.30

Hotels are only one part of a more expensive trip. Airfares in September were 22.4% higher than a year earlier, while overall consumer inflation was 3.7%.14 Put together, travel is getting pricier much faster than the rest of the economy. Yet demand has held up better than most forecasters expected at the start of the year, and the people missing are mostly foreign visitors, not Americans.

How the forecasts flipped

The change over the year is the clearest way to see how much the hotel picture shifted. In February, the STR/Tourism Economics forecast called for only 0.6% RevPAR growth in 2026. That followed a 2025 in which RevPAR fell 0.3%, the first decline the US industry had ever recorded outside a recession.3 Forecasters said then that they saw "no clear catalyst" for a turnaround.3

By June, CoStar and Tourism Economics had raised their full-year estimate to 2.8%, after first-quarter RevPAR came in at a record.1 In August, they raised it again to 4.4% and lifted expected ADR growth from 2% to 3.1%.4 STR President Amanda Hite said the industry sold a record number of room nights in the first half, 11.4 million more than in 2025, and that room revenue rose by more than $5.4 billion.9 PwC also turned more optimistic. It said demand was finally growing faster than supply, though its 2.9% RevPAR estimate from May was more cautious than CoStar's later number.29

The sources broadly agree on why. The FIFA World Cup and the America 250 celebrations boosted leisure and event demand.4 Business travel also came back. Hite pointed to occupancy gains on Tuesdays and Wednesdays outpacing weekend gains, a sign that business and group trips are counting again.8 The mid-September record was not a World Cup effect at all. It came from the timing of the Jewish high holidays and from big conventions, including the International Manufacturing Technology Show in Chicago.28

Limited new supply gives hotels pricing power

The deeper reason rates keep rising is that very few new hotels are opening. HotelPlanner CEO Tim Hentschel said construction simply cannot keep up with demand.26 JLL's Dan Peek told The Real Deal that with little new product arriving, full hotels can "price aggressively."25 CoStar's data supports this. Nearly 767,000 rooms are in the development pipeline, but only 19% are actually under construction, and expected 2026 supply growth was cut to 0.7%.3

This is the most important structural point in the story. When rooms are scarce, revenue growth comes mainly from higher prices rather than more guests. National occupancy was 66.4% in August, still below the summer of 2019, even as rates set records.25 Hyatt's new Hyatt Place prototype, designed to cut construction costs by about 25%, is one attempt to ease supply over time. Any relief from it would take years, not months.30

Record prices, but smaller real gains

This is where the coverage splits, and the split matters. Price-tracking outlets describe a squeeze on travelers. Industry analysts describe owners making little progress once inflation is counted. CoStar's Jan Freitag said that in real terms "there's not a lot of growth." Year-to-date room-rate growth through August was 3.6%, roughly in line with inflation.25 Federal price data shows a similar picture: hotel and motel prices were up 4.3% from a year earlier in September.23

The U.S. Travel Association goes further. It says airfares, lodging and recreation all remain below 2019 levels after adjusting for inflation, with lodging about 13% lower.11 The overall Travel Price Index is still rising faster than the economy as a whole. It is up 8.7% from a year earlier, more than double headline CPI, mostly because of gasoline.11

Both things can be true. Nominal hotel rates are at record highs, which is what travelers see when they book. In real terms, a room is not unusually expensive by historical standards. Travelers feel squeezed mainly because every part of a trip (gas, flights and rooms) is going up at once, not because hotel pricing alone has broken from history.

A split market by price tier and by city

The gains are uneven. From Memorial Day through Labor Day, luxury and upper-upscale hotels grew RevPAR by 10.2%, compared with 3.3% for midscale and economy hotels. That gap narrowed in mid-September.28 The president of the Hotel Association of New York City said wealthy travelers have shrugged off inflation while mid- and lower-tier properties have struggled.25 CoStar expected luxury to lead every chain scale in 2026.1

City results vary just as much. Miami's ADR rose 23.5% to $186.73 in early October, helped by momentum from hosting the World Cup.30 Las Vegas rates fell 12.8% that week, but only because last year's comparison included the PACK EXPO trade show, which has since moved to Chicago. At $204.40, Las Vegas was still the most expensive market highlighted.30

Airfares: fuel, fewer seats and travelers who keep booking

Airfare has been the biggest driver of travel inflation this year. Annual fare increases climbed from 2.2% in January to 26.7% in May, then eased to 23.4% in August.12 The New York Times reported that summer travelers faced fares about 27% higher than a year earlier.18 Reporting consistently ties the jump to the Iran war, which began at the end of February and pushed jet fuel to multi-year highs while disruptions in the Strait of Hormuz dragged on.17 Delta said its September-quarter fuel bill rose 62% to $4.1 billion.14

Fuel is not the only cause. Spirit Airlines collapsed in May, removing an estimated 1% to 2% of US capacity, and carriers have cut weaker routes. Both moves have given airlines more pricing power.17 Holiday fares look even steeper. In late September, Hopper put Thanksgiving round-trips at $402, up 31%, and Christmas fares at $452, up 23%.17 Airlines are not necessarily doing well, though. Analysts have cut profit estimates because fuel costs are eating the extra revenue.17

Demand has been the surprise. As early as April, JetBlue said bookings stayed "resilient" despite higher fares, and economy ticket prices were up 21% to an average of $570.20 That is the same pattern seen in hotels: Americans are paying more and still traveling.

Inbound tourism is falling behind

International visitors are the weak spot. The U.S. Travel Association's May forecast put total 2026 travel spending at $1.37 trillion. Domestic travel makes up 87% of that and has returned to 2019 levels after inflation. International spending was projected to edge up only 1.6% to $178 billion, still 18% below 2019.31

Even that modest projection now looks at risk. According to the National Travel and Tourism Office, international visitors spent about $19.9 billion in August, down nearly 5% from a year earlier. Spending on lodging, dining and recreation fell almost 9%, to $10.8 billion.35 Overseas arrivals dropped about 7% in July, even though the US was hosting the World Cup. Arrivals from Germany and France were down roughly 16% and 15% year-to-date.37 Americans, meanwhile, spent $19.7 billion abroad in August. That left a monthly travel trade surplus of just $157 million.33

One French trade outlet warns against reading too much into the August data. Spending totals do not show whether there were fewer visitors, shorter stays or smaller budgets per trip.33 That caution is fair. Still, the direction has been consistent since early in the year, when Forbes reported a ninth straight month of falling international visits in January.36

Outlook

The most likely path is that prices stay high. Hotel supply will remain tight for years, and CoStar expects ADR to keep driving growth into 2027, though at a slower 1.6%.4 The forecasters themselves warn that late 2026 will lack this summer's one-off events. Hite has flagged weaker results in mid-2027 because of tough comparisons with this year.6 For airfares, a Raymond James analyst expects carriers to cut more flights rather than raise fares across the board if jet fuel stays at $4 to $4.50 a gallon, which would still push prices up.17

The US travel economy is now running mostly on American spending, and especially on wealthier travelers, while foreign visitors stay away. Domestic demand has absorbed record room rates and airfares more than 20% higher. The risk is whether that continues if inflation, now back to 3.7%, starts to cut into the household budgets that have carried the industry through 2026.