H1 2026 Hotel Profitability: What Drove Revenue and Margin Growth
On August 20, 2026, we unpacked what H1 and Q2 2026 hotel profitability data tells us about the market in our latest HotelData webinar: From Momentum to Margin: The H1 Hotel Profitability Story.
Across the HotelData sample, H1 RevPAR increased 8.9%, TRevPAR rose 9.2%, and GOP margin improved 3.6 percentage points to 44.9% for hotels in the US. That means this was not only a demand story. Hotels in our data sample converted stronger revenue into stronger profit.
Luxury hotels raised rates and increased occupancy. Economy hotels also attracted more guests, but at much lower rates. The market strengthened, but not evenly.
Our panelists were:
- Sarah McCay Tams, Head of Research & Editorial, Actabl and HotelData (moderator)
- Brenna Halliday, Founder of B Plum Advisory
- Lance Suksiriwong, Executive Vice President, Naples Hotel Group
- Paul Mengacci, Chief Financial Officer, Desert Hospitality Management
Watch the full webinar On Demand here.
H1 performance improved across the core metrics
The first half of 2026 was stronger than the same period last year across every core metric in the HotelData sample. ADR increased 7.1%. Occupancy also improved, which helped RevPAR grow faster than ADR. TRevPAR grew slightly faster again, showing that the improvement extended beyond rooms.
The profit story is also important. GOP margin increased 3.6 points. That suggests hotels in this sample retained more operating revenue as profit than they did a year earlier.
“The direction aligns with broader STR reporting, which also pointed to stronger-than-expected demand through the first half. But our data lets us go deeper into how that demand translated into profit,” explained Sarah McCay Tams, Head of Research & Editorial, Actabl and HotelData.
But, from a market perspective, does H1 look like a broad recovery, or a stronger market with clear unevenness underneath?
“I think it's fairly broad. We certainly saw marked outperformance for the luxury segment, but economy was the only segment that saw RevPAR slip. And I would argue that all the other segments performed better than expected. We’re also seeing strength across trip purposes as well,” said Brenna Halliday, Founder of B Plum Advisory. “We’ve been expecting a ‘beat and raise’ since ‘early in the year. What we're seeing in the first half of the year is better than expected performance compared to industry forecasts earlier.”
2026 outperformed 2025 in every month in H1
The HotelData report shows that the improvement was consistent throughout the quarter. ADR exceeded 2025 in every month from January through June. RevPAR followed the same pattern. Occupancy also remained ahead of prior-year levels.
June produced the strongest finish, with ADR up 11.4% and RevPAR up 13.1%. That timing coincided with the start of the FIFA World Cup, but the data also shows that the market had already entered June with stronger pricing momentum.
Lance Suksiriwong, Executive Vice President at Naples Hotel Group, explained that the World Cup's impact may have started long before June.
“Yes, the games are the demand drivers, but there's a lot of planning that goes along with that. You have the people that are coming to survey the sites, you have the media, you have the crews that are setting everything up. So, you have those demand generators to prepare for,” Lance explained. However, he caveated that with the fact that the revenue uplift can be a ‘double-edged sword’.
“Yes, you get the demand, but you also get the guest expectations. If they're paying 150% more than what they're typically paying for that same exact room, that expectation increases. So, you have to be able to adapt your staffing model and your service expectations to measure up to that.”
Profit conversion strengthened
At the All Hotels level, GOP margin increased from 41.3% to 44.9% in H1, a gain of 3.6 percentage points. These gains were constant, with hotels retaining a larger share of operating revenue as profit in every month of H1. June recorded the widest margin, reaching 48.6% compared with 44.3% a year earlier.
“That’s a strong result. But profitability requires context, as many hotels continued to feel pressure from labor and operating expenses,” commented McCay Tams.
Paul Mengacci, Chief Financial Officer at Desert Hospitality Management, addressed the questions operators must ask to balance cost pressures with strong margin improvement.
“I'm going to ask where that margin improvement is coming from? Is it coming from rate? Is it cost controls, or is it both? And then diving into those additional details through benchmarking reports, STR on the top line, or a full P&L benchmarking tool for the expenses all the way through GOP, so you can see which specific line items are leading to that margin growth. From here, I want to tie it back to our strategies and see if those are having a meaningful impact. As an example, if our team has shown a greater utilization of late with our labor management tool and that's having a direct impact on cost savings, we would feel comfortable that that strategy was working and it's having a direct impact on that margin improvement,” Paul said.
Luxury pulled away, while Economy remained below 2025
Luxury RevPAR increased almost 16%. Economy RevPAR declined 2.7%, despite the strongest occupancy growth in the dataset.
“That tells us the market is not simply divided between hotels with demand and hotels without demand. Economy had demand. Occupancy increased 4.6 points. The issue was price. ADR fell 9.3%. Luxury had both. ADR increased 10.1%, and occupancy increased 3.4 points. So, the divide is really about pricing power,” Sarah explained.
For Brenna, this data provided evidence that the K-shaped hotel market persists, with Luxury and Economy serving as the ‘bookends’ of the market.
“Typically, you see Luxury and Upper Upscale moving a little bit more together. But here we've seen Upscale in terms of growth year over year do better than Upper Upscale,” Brenna explained.
For Brenna, however, the upside is that consumers are still prioritizing travel, though she urged caution, as the market is currently benefiting from broader economic improvements.
“I also would strike a bit of a cautionary note here about that upper-tier spend because the stock market is still performing very strongly and house prices are very high. And that helps the traveling public feel the wealth effect, which leads to a willingness to spend on leisure. And at the same time, for business travel, when companies see their stock price doing well, they're a little bit more willing to spend.”
In H1 2026, US hotels saw demand increase, rates rise, and RevPAR and TRevPAR move higher. And within the HotelData sample, hotels converted a larger share of operating revenue into profit. Learn more about how they achieved that by downloading the Q2/H1 2026 Hotel Profitability Report.
