The U.S. hotel industry is outperforming 2026 forecasts, driven in part by sustained demand from construction workers tied to AI data center and infrastructure projects. CoStar and Tourism Economics have upgraded their annual outlook twice, with revenue per available room now projected to grow 4.4%, compared with just 0.6% forecast in February. Average daily rates are expected to rise 3.1%, with occupancy edging up to 63.1%.
The strongest gains are emerging in secondary and industrial markets outside major tourism hubs. Hotels near large AI infrastructure projects in Homer City, Pennsylvania, and Abilene, Texas, have recorded annualized occupancy increases of more than 15%. These developments are typically located in suburban or exurban areas where land and electricity costs are lower but hotel supply is limited, amplifying the demand impact.
Workers on multi-year data center and infrastructure projects tend to stay in midscale, upper-midscale, and extended-stay properties rather than luxury hotels, boosting weekday occupancy in markets with historically limited corporate demand. Wyndham reported second-quarter RevPAR growth of 10% in Illinois and Indiana, 9% in Iowa, 7% in Wisconsin, and 6% in Ohio. Hilton CEO Christopher Nassetta noted that infrastructure project workers are lifting performance at brands including Hampton, Home2 Suites, and Tru, with midscale and upper-midscale categories shifting from roughly 2% decline a year ago to growth of 4% to 6%. Marriott has reported similar strength across Courtyard, Fairfield, and SpringHill Suites.
The demand carries a built-in risk. Data centers require large construction crews during the build phase but far fewer workers once operational, meaning hotels dependent on project-related guests could face sharp demand drops when construction ends.
U.S. hotel supply is expected to grow just 0.5% in 2026, well below long-term averages, amplifying near-term upside. CoStar and Tourism Economics project RevPAR growth of 2.1% in 2027.
