Travelers are spreading trips across the calendar, paying selectively for premium stays and keeping pressure on the more price-sensitive end of the market.

Hotel development is still accelerating. The global construction pipeline reached a record 15,922 projects and 2.44 million rooms at the end of 2025, according to Lodging Econometrics. Around 1.06 million rooms were already under construction, while 389,175 new rooms are forecast to open during 2026.

Growth is not confined to one price point. Luxury development reached a record 1,328 projects at the end of 2025, but upscale and upper-midscale hotels together accounted for more than 8,300 projects.

Premium stays keep their appeal

The higher end continues to attract both developers and travelers. Luxury projects worldwide reached 1,385 by Q2 2026, representing almost 258,000 rooms. Europe is following the same trend, with the number of luxury developments reaching a record high at the end of 2025.

However, overall hotel performance is becoming more dependent on pricing than on simply filling additional rooms. STR and Tourism Economics forecast RevPAR growth of 1.2% across 31 European markets in 2026, largely driven by higher average daily rates rather than occupancy. In the US, where demand was boosted by the FIFA World Cup, 2026 RevPAR growth is forecast at a much stronger 4.4%.

Asia-Pacific is also attracting capital. Hotel investment in the region reached US$8 billion in the first half of 2026, up 21% year over year, led by Japan, mainland China and Korea.

Short-term rentals enter a more mature phase

Vacation rentals tell a similar story of plentiful supply but tougher competition. Europe had 4.18 million available short-term rental listings in July 2026. Demand nights increased by just 0.8%, leaving occupancy virtually flat at 69.2%. Hosts nevertheless pushed average daily rates up 8.2% to €159, taking RevPAR 7.7% higher.

Growth in Europe’s vacation rental market is increasingly being shaped by regulation as well as demand. New EU transparency rules took effect in May 2026, requiring greater sharing of registration and activity data between platforms and public authorities. Individual destinations are going further as regulatory delistings have continued. In Spain, for instance, available listings fell 12.5% year over year in July, equivalent to around 52,000 properties. Against this backdrop, European short-term rental supply grew just 1.9% in July 2026.

There are signs that travelers are changing when they stay as well as where. September and October bookings were running 6.9% and 6.0% ahead of 2025 respectively, suggesting a continued shift toward the shoulder season. Luxury rentals were also proving more resilient than budget properties during softer periods: in June, European luxury occupancy fell 0.9% year over year compared with 3.1% for budget listings.

Key figures:

2.44 million
rooms in the global hotel construction pipeline at the end of 2025

€159
average daily rate for European short-term rentals in July 2026