In 2025 the U.S. hotel industry had its first full-year decline in occupancy and revenue per available room since 2020. CoStar reported occupancy of 62.3 percent, down 1.2 percent, an average daily rate of $160.54, up 0.9 percent, and RevPAR of $100.02, down 0.3 percent 1.
Inside that soft total sat a divided market. CoStar’s analysts wrote that the industry showed a clear performance divide across property classes in 2025, and that luxury class hotels outperformed all other classes 2. This piece looks at where that divide shows up, what is happening to supply, and which signals tend to appear before an opportunity becomes obvious.
A two-speed hotel market
The gap was visible by mid-2025. Reporting on CoStar data for July 2025, CRE Daily noted a 3 percent rise in ADR and RevPAR for luxury hotels, while economy hotels posted a 0.8 percent decline in ADR and a 1.9 percent drop in RevPAR 3.
The pattern carried into private residences. Key Data’s 2025 review of the vacation-rental market found that units priced up to $400 a night saw rate declines, while those at $600 and above saw rate gains, and that properties at $1,000 and above showed no RevPAR erosion 4. Affluent travelers kept traveling and kept paying for quality.
Demand broadened in 2026. CoStar reported that in June 2026 U.S. ADR rose 6.7 percent and RevPAR 8.4 percent year over year, the highest monthly increases since March 2023, helped by the World Cup. Miami posted the strongest ADR gain among major markets, up 23.2 percent 5. In August, CoStar and Tourism Economics raised their full-year 2026 RevPAR forecast to 4.4 percent growth, up from 2.8 percent, citing stronger leisure and business travel 6.
A record count is still a small one.
Supply is the slower variable
Rate growth matters most where new rooms are slow to arrive. Lodging Econometrics, as reported by Hotel Dive, counted 6,020 projects in the U.S. hotel construction pipeline in the first quarter of 2026, down roughly 5 percent from a year earlier. Luxury projects reached a record 102, up 16 percent 7.
A record count is still a small one. One hundred and two luxury projects in a pipeline of more than six thousand leaves the segment thin, and luxury hotels take years to plan and build. The same report named Dallas, Atlanta, Phoenix, Nashville and Austin among the most active pipelines overall 7, which is a reminder to look past headline growth and examine what tier the new rooms serve.
The pattern is not only American. CBRE reported in September 2026 that luxury hotel demand in Australia and New Zealand has grown at 2.9 percent a year since 2019, more than double the broader sector’s 1.3 percent, and that the future luxury pipeline there thins materially as feasibility constraints limit new projects 8.
What private aviation is signaling
Private flying is an early read on where wealthy travelers are going. WingX reported that global business jet flight sectors rose 5 percent in 2025 compared with 2024, and that North America accounted for 72 percent of global traffic 9. Argus data in the same report showed fractional activity in North America up 8.4 percent in December 2025 from a year earlier 9.
The geography is as telling as the volume. Speaking in September 2025, WingX managing director Richard Koe said business jet activity in the Miami area was 70 percent above pre-pandemic levels and that the Southeast region was up 46 percent compared with 2019. He linked the shift to wealth migration that has brought millionaires to places like Austin, Scottsdale and Palm Beach 10.
Miami, Austin, Scottsdale and Palm Beach are Sun Belt and resort markets with strong leisure appeal. Where those travelers land, they need somewhere to stay that matches the way they flew.
Signals that precede an opportunity
From the sources above, a few signals tend to move before a market is widely recognized as undersupplied at the top end.
First, sustained growth in private aircraft arrivals relative to pre-pandemic levels, especially in markets that were not traditional winter or summer destinations 10. Second, luxury rate growth that holds while lower tiers soften, a sign that demand at the top is not simply following the economy 23. Third, a pipeline in which new rooms are concentrated in lower tiers, leaving luxury demand to be met by a small number of hotels and private residences 7. Fourth, high-end residences holding rates while the broader rental market adds supply 4.
No single signal is decisive. Together, they describe a market where the right property can command a premium for years rather than a season.
What this means for you
For travelers, these markets reward planning. Peak dates in places with rising private-aviation traffic and thin luxury supply fill early, and the best rooms and residences go first. Booking well ahead, and having aircraft and accommodation arranged together, removes much of the uncertainty.
For owners, the same data suggests that a well-presented residence in a supply-constrained market is a scarce asset. Pink List members can hold aircraft, hotel nights and residence stays against one balance, which makes it simpler to act when the dates matter.