U.S. Hotels See Strong Surge Over New Year's

Key Points

• RevPAR Surge: U.S. hotels saw a 7.9% RevPAR increase in the Dec. 28-Jan. 3 week, exceeding expectations with 2.1-point occupancy rise and 3.4% ADR growth.
• Market-Wide Gains: 78% of markets reported RevPAR upticks, led by Miami's 26.4% jump; hurricane-impacted areas dragged some down.
• Segment Strength: Luxury hotels topped with 13.2% RevPAR growth, while economy improved to 1.9% excluding hurricanes, signaling broad recovery.

U.S. hotel performance kicked off 2026 with an unexpected bang, delivering RevPAR gains that outpaced forecasts and offered a welcome lift amid ongoing challenges. For hotel owners and investors, this signals potential stabilization in a sector still navigating hurricane aftermath and economic headwinds.

Unexpected New Year's Performance

Initial projections underestimated the New Year's boost, with RevPAR rising 3.4% on the holiday itself despite its midweek placement. Room demand jumped 5.2% overall, adding nearly 1 million room nights year-over-year, driven by transient travel. This defied historical trends for Wednesday holidays, ranking ninth in demand since 2000.

Broad Gains Across Markets

RevPAR advanced in 78% of U.S. markets, including 21 of the top 25. Miami shone with 26.4% growth, fueled by New Year's travel and the Orange Bowl, hitting 88% occupancy and $383 ADR. Other standouts included Minneapolis, Dallas, and New York with double-digit increases. Non-top 25 markets grew 10.9%, with Buffalo leading at 66.4% thanks to NFL events. Hurricane markets fell 15.5%, but excluding them, national trends look even stronger. Las Vegas ended a 12-week RevPAR decline, flattening out and stabilizing its drag on U.S. averages.

Performance by Hotel Class

Gains spanned segments, with luxury up 13.2% in RevPAR and economy down 3.3%—but adjusting for hurricanes, economy rose 1.9%. Midscale and upscale classes advanced 6%+, highlighting bifurcation but also shared momentum. High-occupancy hotspots like the Florida Keys (90.1%) and Miami underscore demand for premium locations.

Global Context

Outside the U.S., global RevPAR surged 12.3%, led by China's 23.8% gain from an extended holiday. Strong performers included the Caribbean, Canada, and Australia, offering comparative insights for diversified portfolios.

Why This Matters for Investors / Landlords

This early 2026 uplift provides actionable optimism for hotel investors, pointing to resilient demand in key markets and potential for higher yields in non-hurricane areas. Landlords can leverage rising ADR and occupancy to negotiate stronger leases or pursue acquisitions in high-growth spots like Miami or Buffalo. However, hurricane vulnerabilities highlight the need for risk assessments and insurance strategies in portfolios.

In summary, while Q1 RevPAR may dip, this strong start fuels cautious confidence—positioning savvy investors to capitalize on recovery trends in a stabilizing hospitality landscape.