OCC. |
ADR |
REVPAR |
OCC. |
ADR |
REVPAR |
OCC. |
ADR |
REVPAR |
|
Luxury |
68.0 % |
$ 416.71 |
$ 286.01 |
67.0 % |
$ 389.68 |
$ 262.83 |
1.8 % |
6.9 % |
8.8 % |
Upper Upscale |
69.0 % |
$ 232.24 |
$ 160.74 |
68.0 % |
$ 224.19 |
$ 152.80 |
1.5 % |
3.6 % |
5.2 % |
Upscale |
70.3 % |
$ 170.18 |
$ 119.58 |
69.0 % |
$ 165.30 |
$ 114.75 |
1.2 % |
2.9 % |
4.2 % |
Upper Midscale |
67.2 % |
$ 139.11 |
$ 93.45 |
66.0 % |
$ 136.11 |
$ 90.08 |
1.5 % |
2.2 % |
3.7 % |
Midscale |
59.8 % |
$ 103.27 |
$ 61.72 |
59.0 % |
$ 102.18 |
$ 60.15 |
1.5 % |
1.1 % |
2.6 % |
Economy |
53.8 % |
$ 77.44 |
$ 41.65 |
53.0 % |
$ 78.10 |
$ 41.90 |
0.2 % |
-0.8% |
-0.6% |
SOURCE: COSTAR |
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They don’ t want to own real estate,” Karver said.
The result is a market in which deals are getting done, but potentially fewer than would occur if owners were under greater pressure to transact.
BRAND BLOAT The development environment is also helping shape the evolution of hotel brands. Karver said there was significant“ white space” in the hotel landscape five years ago, but much of it has now been targeted by major hotel companies launching new concepts, particularly in midscale, economy and extended-stay categories.
Those segments benefit from lower construction costs and relatively straightforward development economics.
The proliferation of brands has also given owners more options. Rather than choosing between operating independently and committing to a traditional full-service flag, owners can increasingly choose soft brands, licensing arrangements and strategic partnerships that provide access to distribution and
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loyalty programs while allowing greater flexibility. And example includes the partnership between Hilton and Yotel, which is ostensibly a franchise agreement that was inked in March.
Karver expects that trend to continue.“ I don’ t think you’ re going to see this tsunami of second- and third-generation hotel owners get out of the flags,” he said.“ I think they’ re just going to think about the flag partnerships a little bit different.”
Hotel companies are also extending their brands beyond traditional hotels. Karver sees opportunities in branded residences, outdoor lodging, RVs and other adjacent businesses where hotel companies can reach consumers who are already engaged with their loyalty ecosystems.
The logic is straightforward: If consumers are spending money outside the traditional hotel environment, hotel companies increasingly want a way to participate.
Looking ahead, Karver expects consolidation among hotel management and brand
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companies to continue, particularly as companies look for ways to become leaner and more attractive to consumers.
His broader outlook for the industry is decidedly positive. Despite the proliferation of brands and the industry’ s headwinds, Karver said hotel fundamentals remain strong. New hotel supply continues to lag historical levels, and he does not expect construction to accelerate enough to dramatically close that gap.
“ Demand will continue to be there,” he said.“ Rates will continue to have the ability to go up and, absent any crazy supply growth, which I don’ t think is coming, the hotel business will continue to be a strong business.”
AI NOW AI is another factor that could reinforce that trajectory, particularly in distribution and the booking experience. AI will ultimately make it easier for consumers to find and book hotels, according to Karver, and could give owners more opportunities to command higher rates by delivering a better overall experience.
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“ I think it’ s only going to make the experience for consumers stronger,” he said.
While some hotel executives worry that AI-powered search could shift bookings toward OTAs rather than direct channels, Karver sees the hotel companies as better positioned than the intermediaries to adapt.
“ The OTAs are the ones that should be worried about what’ s happening in the AI space,” he said.“ Owners are still the one with the product.”
For Karver, that product— and the industry’ s ability to adapt it to changing consumer preferences— remains the central reason for optimism. The hotel industry has faced predictions of an impending reckoning before, he noted, yet it has repeatedly adjusted.
The next phase may involve fewer new hotels, more conversions and renovations, greater flexibility in brand relationships and increasingly sophisticated ways of reaching consumers. But with demand holding up and supply constrained by economics, Karver sees the fundamental equation remaining favorable.
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56 hotelsmag. com Oct / Nov 2026 |