The latest hotel supply trends reveal a market shaped by strong event-driven demand and moderating construction activity. Valentine’s Day, the Super Bowl, Mardi Gras, and NBA All-Star Weekend delivered significant performance gains. At the same time, rooms under construction continue to decline, signaling a more restrained supply pipeline.
These hotel supply trends, combined with slower economic growth, offer important insight for owners and investors as we move further into 2026.
The week of February 8–14 delivered one of the strongest February performances in recent years.
U.S. hotel RevPAR increased 4.6% for the full week. On Valentine’s Day alone, RevPAR surged 12.1%. Even excluding that single day, RevPAR still rose 2.7%, showing broader demand strength.
Full-week occupancy climbed 1.6 percentage points to 61.5%, its highest level since early November. ADR increased for the third consecutive week, rising 1.9%, although rate growth remained below inflation.
Valentine’s Day itself produced standout results:
Luxury through upper-midscale hotels all reported occupancy above 80%. RevPAR gains in those segments exceeded 10%. The economy segment posted high single-digit RevPAR growth.
Importantly, occupancy, ADR, and RevPAR marked the best Saturday results since mid-October 2025.
While Valentine’s Day anchored the week, several large-scale events amplified hotel demand trends across the country.
More than half of all U.S. markets reported weekly RevPAR growth of 5% or more. One-third achieved double-digit gains.
Super Bowl Sunday drove exceptional performance in San Francisco and San Jose.
The two markets recorded a combined 492% RevPAR increase on Sunday. Combined ADR surpassed $524, with San Francisco reaching $616. Occupancy across the two markets reached 80.8%, driven by San Jose’s 82.6% occupancy.
Supply growth played a meaningful role. Since 2016, San Jose’s hotel supply increased 13%, while San Francisco’s supply grew only 2%. As a result, more fans stayed in San Jose, closer to Levi’s Stadium. San Jose posted a 12-percentage-point occupancy increase compared to the 2016 Super Bowl.
Last year’s Super Bowl in New Orleans shows how concentrated supply can amplify volatility.
During that weekend, ADR reached $815 and occupancy climbed to 93.6%. However, weekly RevPAR declined 20.3% after the event. Sunday and Monday RevPAR fell 82.9%, then rebounded 17% Tuesday through Thursday. Performance ultimately surged 82.5% during the final Mardi Gras weekend.
This comparison highlights how market size and supply levels shape hotel demand trends before and after major events.
Los Angeles experienced a 26.5% RevPAR increase during NBA All-Star Weekend. The growth was driven by an 18.2% ADR gain and a five-percentage-point occupancy increase. Weekend occupancy reached 91%.
Luxury and upper-upscale hotels captured most of the demand growth. Meanwhile, San Francisco, which hosted the event last year, saw weekend RevPAR decline 40.8%.
Saturday RevPAR leaders included:
Chicago, Dallas, Las Vegas, Saint Louis, and Seattle also reported strong double-digit gains.
However, hurricane-impacted markets remained a drag, posting an 8% weekly RevPAR decline. Without those markets, weekly RevPAR growth would have reached 5.4%.
Beyond transient travel, group demand showed notable improvement.
Group demand increased by 5.8% for the week. Weekdays accounted for nearly all of the growth.
Los Angeles and New York recorded the largest increases. San Diego and Atlanta posted smaller gains. The early-year event calendar is clearly driving both leisure and group segments.
These patterns reinforce the importance of event-driven demand in current hotel supply trends.
While demand accelerated, supply growth continued to ease.
Rooms under construction are trending downward. The number of hotels under construction has declined, and total room growth remains relatively flat compared to the aggressive expansion cycle from 2016 to 2019.
When examining the past decade, inflation-adjusted construction and renovation activity appears to be declining. Elevated material costs, reflected in the Producer Price Index (PPI), are influencing development decisions.
Higher construction costs are likely leading to:
As total rooms under construction decline, future supply pressure may remain contained.
Hotel supply trends must be viewed within the broader economic context.
The U.S. economy expanded at an annualized rate of 1.4% in Q4 2025. This was well below the 4.4% growth recorded in Q3 and below the 3% forecast.
The October government shutdown played a major role. Government spending and investment contracted 5.1%, subtracting 0.9 percentage points from overall growth.
Consumer spending slowed to 2.4%, down from 3.5%. Goods purchases declined slightly, while services spending increased 3.4%. For full-year 2025, GDP grew 2.2%, compared to 2.8% in 2024.
Despite slower GDP growth, labor conditions remain stable.
Initial jobless claims fell to 206,000 in mid-February, below expectations. Continuing claims edged up to 1,869,000. Overall, the data reflects limited layoffs and steady employment conditions.
A stable labor market continues to support travel demand and overall hotel demand trends.
At the state level, Colorado provides an important example of current hotel supply trends.
There are more than 1,400 hotel owners statewide. Room distribution remains relatively balanced:
Denver holds approximately 26,600 upscale-to-luxury rooms, making it the dominant higher-end concentration within the state. This concentration underscores Denver’s importance in driving statewide performance at the upper tiers.
The latest data shows a clear pattern. Event-driven demand remains strong, while supply growth continues to moderate. Although GDP slowed due to temporary government disruption, the labor market remains stable.
As we move further into 2026, understanding hotel supply trends will be critical. Event calendars, construction pipelines, and local market supply concentration will all shape performance outcomes.
If you are evaluating acquisition opportunities, considering a disposition, or assessing how shifting hotel supply trends may impact your portfolio, our team is here to help. Contact us to discuss how these latest market signals may affect your specific assets and investment strategy.