The hotel industry is heading into 2026 with a widening gap between luxury and the rest of the market as RevPAR growth at the high-end far outpaces other segments.
It's a trend that shows no signs of changing course next year, thanks to what economists have dubbed a K-shaped economy in which high-income earners pull ahead and lower-income groups lag behind. According to an early December report from Colliers, that K-shaped economy is "a trend that has deepened since the pandemic and is expected to persist into 2026."
The report, 2026 CRE Reset: Stability Through Uncertainty, also said that high-income earners, which Colliers defines as households with the top 10% of incomes, will continue to drive a growing share of hotel room demand for 2026.
At the same time, new divisions are emerging even within the luxury segment. In Embark's Q4 2025 Travel Trends Report, founder Jack Ezon said that luxury travel itself has become "distinctively bifurcated," with a rift growing between the ultrawealthy and a demographic he calls "the poor rich," or "aspirational luxury traveler." Those travelers are being squeezed by inflation, Ezon said, and slowing demand from that demographic has created unusual hotel booking patterns.
"Suites are going for higher rates than ever and quickly sell out, while base-rate deluxe rooms or opening categories remain barren," he said, with most luxury properties happy to maintain higher rates, even at the expense of occupancy.
Ezon warned, however, that ultraluxury clients can end up "insulted by rates when the service experience does not align with the price."
"It's a bad long-term strategy," he said.
It's also generally seen as bad strategy to put all your eggs in one basket. But in 2026, as "aspirational luxury" demand potentially continues to slow, high-end hotels may be forced to place their bets on the basket of ultraluxury travelers.
The revamped lobby of the Ritz-Carlton Key Biscayne Miami. RevPAR growth at the high end of the hotel market is far outpacing other segments heading into 2026. Photo Credit: The Ritz-Carlton Key Biscayne Miami
Hotels set to score with the World Cup
While the broader industry navigates uneven growth, summer 2026 will bring a major opportunity for key U.S. markets: the FIFA World Cup.
The tournament, which kicks off in June, is projected to generate nearly $900 million in incremental hotel room revenue across U.S. markets alone, essentially equating to "10 Super Bowls within six weeks," according to a Tourism Economics research briefing from mid-November.
Room revenue impacts in host markets should range from 7% to 25% in June 2026, with the biggest gains set to be concentrated around match dates. When July is included, Tourism Economics forecasts a 1% to 5% impact on annual room revenue for host markets.
How the tournament shapes occupancy and ADR will depend largely on cities' usual seasonality. High-demand summer markets like New York, Boston and Seattle, where June occupancy traditionally tops 80%, are likely to see high demand and occupancy, resulting in sharply elevated ADR. Occupancy gains in these markets, however, could be more moderate, as the heightened World Cup demand may displace tourists who want to avoid higher prices.
Meanwhile, cities where June is generally slower, like Houston, Los Angeles and Miami, are on track to see significant increases in rooms sold, paired with more moderate rate growth.
The boost will come at a critical time for many host cities.
The top 25 U.S. hotel markets have been hit particularly hard by declining international inbound travel and softening group demand in 2025, making the World Cup's influx of international visitors especially welcome next year.