Research

The Lodging Sector Drives Stronger Performance in 2026

According to Smith Travel Research (STR) and AirDNA, total lodging supply has continued its steady expansion through 2026, growing from 3.1 million available listing nights in 2019 to nearly 5.6 million—largely driven by rapid growth in the short-term rental sector. While hotels accounted for 66% of supply in 2019 compared to 34% for rentals, this mix has shifted significantly over time: the gap narrowed to 53%hotels versus 47% rentals by 2023, reached parity in 2024, and by 2025 rentals became the majority at 54%, rising to 56% today. Although new hotel inventory is expected to come online later this year, the structural shift toward alternative accommodations continues. Regionally, the strongest rental supply growth is occurring in the South (+13%) and Central (+15%) regions, though these areas still represent a relatively small share of total island supply at approximately 5–7%.

Limited growth in hotel inventory, combined with strong demand, has supported stable pricing and driven gains in RevPAR. In May, hotel RevPAR reached $201, the highest level since 2023, reflecting a 13% year-over-year increase, while the short-term rental segment rebounded from its post-2021 decline, rising 6% to $102. Year-to-date, hotel RevPAR has grown 8% from $255 to $278, whereas rental RevPAR has remained essentially flat at $122 as continued supply expansion offsets pricing gains.

STR indicates that U.S. Hotel RevPAR for summer 2026 will see moderate growth, supported by resilient leisure demand and major events like the FIFA World Cup, with gains driven primarily by higher room rates rather than occupancy increases.

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