CONSUMER SENTIMENT IS AT RECORD LOWS. WHY ARE HOTELIERS SO OPTIMISTIC?

By DAVID EISEN

onsumer sentiment fell for the third straight month in May, according to the University of Michigan Surveys of Consumers. Sentiment is now just below the previous historical trough seen in June 2022, as high prices at the pump weigh on American households. But despite the unease and worry, hotel executives, at the NYU IHIF conference at the Marriott Marquis, in New York, continued to strike a buoyant chord that was supported by prognosticators who raised forecasts on the strength of travel.

“ We are at the lowest consumer sentiment, inflation is still high, but there appears to be a decoupling of how people feel and how they act and how they spend,” said Adam Sacks, president of Tourism Economics.

The U. S. Consumer Price Index( CPI) increased by 0.5 % in May 2026, rising 4.2 % yearover-year.

Still, CoStar revised its forecast up,“ a lot,” said Jan Freitag, national director of hospitality analytics for CoStar Group. It now forecasts revenue per available room

( RevPAR) up 2.8 % year-overyear, led by average daily rate growth of 2 %.“ Supply is not a big issue,” Freitag said, with only a trickle of new groundup hotel development due to variables including stubbornly high interest rates and high cost of construction. Both have conspired to stymie new development as more brands grow through conversion opportunities of existing assets. The good news is that hotel demand has outweighed new hotel supply at around a 1x clip.

“ Luxury,” he continued,“ continues to win,” as the

8 hotelsmag. com July / August 2026