CoStar’s hotel-market analysis of 2026 international outbound, inbound and exchange-rate dynamics explains why the U.S. recovery is running on domestic demand — and how hoteliers can plan against the drag.
Published: November 13, 2026 | Data & Trends
The News
A CoStar hotel-market analysis of 2026 international travel trends laid out what the industry’s data desks have been flagging all year: the U.S. lodging recovery is being carried almost entirely by domestic demand, with stagnant — and in some categories shrinking — overseas demand.
The structural forces behind the trend:
A strong dollar. The U.S. dollar’s relative strength against European, Canadian and Asian currencies means that a New York or Maui hotel night that cost a European or Japanese visitor 15–25% less in local-currency terms two years ago now costs meaningfully more. That math alone reshapes travel decisions at the discretionary-spend margin.
Visa and entry friction. Extended visa-processing backlogs, and entry-screening changes, have raised the cost and uncertainty of U.S. trips for travelers from emerging markets — the segment with the longest stays and highest spend per trip. Business-event planning has shifted toward destinations perceived as administratively easier.
Perception. U.S. inbound marketing, and favorability drivers within tourism sentiment, weigh on discretionary decisions for overseas travelers who can choose between Hawai’i, Portugal and Thailand for the same airfare. Where the U.S. was once the default aspiration for international long-haul leisure, it now competes with other long-haul destinations that offer better currency economics for many.
Competitive markets. Mexico, Canada, the Caribbean and domestic-flag U.S. territories offer aspirational luxury at lower landed cost. The shift is especially visible in luxury shopping and hospitality spend where overseas travelers previously outspent domestic guests.
The composition effect is what hoteliers should actually plan around: the loss is concentrated in the long-stay, high-spend luxury leisure and sophisticated international business categories, which have a disproportionate impact in gateway-city hotels (New York, Los Angeles, Miami, San Francisco, Boston), luxury properties in resort markets and convention-heavy urban hotels.
Offsetting demand sits in domestic high-income leisure, group/convention resurgence and extended-stay project-driven demand — which is exactly why national RevPAR numbers look strong while gateway-city luxury RevPAR lags the broader market.
What it means for hotel and travel businesses
For gateway-city hotels: the deficit is measured in high-value guests who used to stay longer and spend more per day. Rates won’t fix what demand-mix lacks. Your revenue strategy should compensate by (a) growing domestic-luxury programming, (b) chasing group/international-backup and small-meeting business, and (c) incentivizing longer-stay domestic bookings that mimic the lost high-spend profile.
For owners with exposure to international-skewed markets: Underwrite 2026 and 2027 with explicit international-arrival assumptions rather than category-average RevPAR benchmarks. A property in Orlando and one in Manhattan with the same brand may have materially different 2026 trajectories because of this demand-mix effect.
For destination-marketing organizations: the response to currency and entry friction is product, not price. Marketing spend should lead with what the U.S. offers that substitute long-haul destinations don’t — national-park itineraries, entertainment and sports calendars, cultural experiences — to justify the premium.
For travel sellers and international-focused operators: Recommend package economics that hedge currency pain — inclusive pricing, bundled experiences, prepaid excursions. The overseas traveler who books a fully prepaid U.S. itinerary today is more rate-insulated than one arriving and paying locally.
Key numbers
- U.S. inbound 2026 trend: stagnant-to-declining international demand, per CoStar’s hotel-market reporting
- Loss concentration: gateway cities, luxury resorts, long-stay high-spend categories
- Offsets: domestic high-income leisure, group/convention demand, extended-stay strength
- Structural drivers: strong dollar, entry/visa friction, competing long-haul destinations
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