Puerto Rico Leads Hotel Demand Growth with 11% Increase
Hotel Demand in Puerto Rico Grows 11%, Surpassing U.S. Average
According to January’s CoStar (STR) hotel lodging demand-by-state report, Puerto Rico overperformed the U.S. average in year-over-year growth. With 11% more nights sold, the Island sold more hotel rooms than every state in January, except Minnesota (Minneapolis) (+11.3%), and surpassed the U.S. average of 0.5%. Since August, Puerto Rico has averaged 10% monthly hotel demand growth, thanks in part to increases from the group and business transient segments.
Data from the National Travel and Tourism Office (NTTO) shows that overseas travel to Puerto Rico continues to outperform other U.S. destinations. As of January 2026, overseas arrivals to Puerto Rico are up 82% from pre-pandemic 2019 levels. In contrast, the United States overall is seeing 17% fewer overseas arrivals than in 2019. The decline is especially pronounced in states along the Canadian border and on the West Coast, including California (–32%), Hawaii (–49%), Washington (–45%), and Oregon (–40%).
January Aerostar data indicate that arrivals from Europe and South America increased by 15% year-over-year. At the same time, Tourism Economics highlights that visa processing delays remain a significant barrier in several key markets. As of February 2026, travelers from Colombia face an average wait of 345 days for a U.S. visa appointment, while applicants from the Dominican Republic face roughly 480 days.
The official U.S. inbound travel forecast—which currently projects international arrivals to exceed 2019 levels this year, reaching 85 million visitors—has not yet been updated in response to the conflict in Iran. The most recent published outlook still anticipates a full recovery surpassing 2019 volumes in 2026. However, forecasting agencies are widely expected to revise their projections once the extent and duration of the disruptions become clearer.
Travelers Prioritize Local Experiences and Slower-Paced Travel
According to the February edition of the “State of the American Travel” from Future Partners, American travelers are entering 2026 with clearer preferences around how they want to experience destinations. Many are opting for slower, more grounded trips, with just over half saying they stayed in one place rather than hopping between multiple locations over the past year. This preference is even stronger among younger travelers, especially Gen Z, where two-thirds reported choosing single-destination trips. Alongside this shift, travelers continue to show interest in connecting more deeply with the places they visit—whether through local culture, nature, or day-to-day life. Generational differences are becoming more pronounced, especially around immersive and exploratory travel styles.
Younger cohorts, particularly Gen Z and Millennials, are far more likely to seek out lesser-known places and intentionally weave local experiences into their trips. In contrast, Baby Boomers show lower engagement in these behaviors, especially when it comes to going out of their way to explore off-the-beaten-path areas. Despite these differences, the trend toward more meaningful, experience-driven travel is present across the board, suggesting a broad shift in how travelers define a satisfying trip.
At the same time, political dynamics are increasingly influencing comfort levels and travel decisions. Nearly half of surveyed travelers said increased federal agency presence in certain U.S. cities makes them feel less comfortable visiting those destinations, while about one in four actually feel more secure. The impact varies across demographics—Baby Boomers were most likely to express discomfort, while parents with school-aged children were among the groups more likely to feel at ease. Notably, majorities of Asian and LGBTQIA+ travelers reported decreased comfort, highlighting uneven effects across communities. With nearly one in four Americans planning to avoid certain cities due to federal activity, the political climate is now becoming a more visible factor shaping domestic travel behavior.
Advanced Bookings Reflect Sustained Tourism Demand
Looking ahead to the next five months, hotel and rental reservation activity remains strong. As of February 22,
2026, Amadeus Hospitality reports March hotel occupancy at 74%, which is 17% higher than the same time last
year. April is showing even stronger performance, pacing 19% ahead year-over-year. All segments—groups,
transient leisure, and business—are pacing ahead of last year every month through the first quarter. After pacing
behind in the last few months, leisure reservations have increased in Q2, helping summer-month hotel occupancy
enter positive territory, with May occupancy currently pacing 4% ahead and June 2%.
Short-term rental activity continues its impressive growth trend. According to AirDNA, as of February 23, 2026,
every upcoming month is expected to see an increase in booked listing nights. March currently has 12% more
nights booked, while April is performing better with 27% more nights. Demand for the second quarter is also very
strong, with an average of 28% more listing nights booked.
Short-term rentals in the central mountain region and along the southern coast are seeing faster growth in booked
room nights for the coming five months. Both areas show notably stronger pacing—31% in the Central region and
37% in the South—compared with the Western region, which is currently at 17% for March through July.
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