US hotel executives say interest rate hikes and volatile performance swings have made revenue forecasting unusually difficult, according to a CoStar report on the sector's leadership.

The report, focused on the US hotel industry, centers on a concrete operational problem rather than a demand story: leaders can no longer reliably project the key line items — occupancy, average daily rate, and revenue per available room — that drive budgeting, staffing, and distribution decisions.

Why does this matter for sellers of travel?

Forecasting is not an academic exercise for hotel operators. Revenue projections determine how much inventory chains and independents push into merchant and agency channels, how aggressively they discount through opaque channels, and where they set commissionable rates versus direct-only inventory.

When projections wobble, distribution strategy wobbles with them. Hoteliers that cannot trust their forward occupancy curves tend to hold rate and restrict wholesale allotments — a shift that wholesalers, bedbanks, and online travel agencies feel in reduced access to contracted inventory.

What changed?

Two forces are colliding, according to the CoStar account:

• Interest rate hikes — higher borrowing costs pressure hotel owners holding variable-rate debt, and they change the calculus on refinancing and capex at a time when brands want property-level investment in product and technology.
• Performance swings — uneven demand across markets and segments has made quarter-to-quarter comparisons less predictive, degrading the statistical base on which revenue managers build forward models.

For executives, the combination is the problem. Either factor alone is manageable; together, they widen the confidence interval around every projection a hotel company publishes or budgets against.

How should the trade read it?

The signal for distributors and intermediaries is caution on forward commitments. If operators themselves say their visibility has deteriorated, partners negotiating allotments, static pricing, or long-tail commission structures should expect hoteliers to price uncertainty into those deals — or to avoid locking themselves in at all.

Investors should treat full-year guidance from hotel companies in this environment as a projection, not a measured result, and weigh management commentary accordingly when comparing against filings and market-sizing data.

CoStar's reporting suggests the near-term outlook for US hotel planning will stay difficult until rate policy stabilizes and demand patterns settle into a readable pattern.