After a year-over-year decline in bookings six months into 2025 and a decrease in tourism statewide, the industry is pointing to a sequence of major events across Massachusetts that could help boost the sector into recovery in 2026.

Massachusetts saw no change in lodging rooms booked, an almost 2 percent decrease in booked hotel rooms and a just over 9 percent increase in short-term rental bookings year-over-year as of June 2025, according to the Office of Travel and Tourism.

State lodging and tourism leaders shared data covering the first six months of 2025 and projections for 2026 at the Thomas M. Menino Convention Center during the Massachusetts Lodging Association’s (MLA) Outlook 2026 event last week.

“We know that travel and tourism events, hospitality, lodging – together, they make up just a critical foundation of our state’s economy, our state’s culture and frankly, our competitive position in the national global economy,” Lt. Gov. Kim Driscoll said at the event.

Revenues Up Despite Tourism Slump

Tourism created $23.6 billion in domestic and international spending in Massachusetts in 2023, representing a 5.3 percent increase over calendar year 2022. Tourism generated $2.3 billion in state and local taxes and supported nearly 155,000 jobs, according to a 2023 tourism economic impact report.

“That is nothing for us to shake [our] finger at,” Driscoll said, calling the tourism, hospitality, art and culture sector a “tried and true economic development area.”

The Office of Travel and Tourism reported Wednesday that lodging revenue increased from June 2024 to June 2025 by just over 2 percent due to higher average room rates. A 2.3 percent decrease in local occupancy taxes gathered statewide was driven by a more than 5 percent decrease from April through June.

The average daily rate and revenue per available room increased by 2.5 percent during the same period in Boston and Cambridge, according to MLA data presented by Pinnacle Advisory Group principal Rachel Roginsky.

That’s being sustained by a combination of inflationary pressures from things like hotel workers’ wages and little new hotel construction to soak up the steady demand, with Boston hotels’ average revenues per available room ranking third in the U.S. as 2025 opened. The trend has sent investors lining up to buy existing hotels in the Boston area.

Lodging Association projections for 2026 suggest that along with increases in daily rates and revenue per room, occupancy will rise in the area by 1.3 percent. Similar trends are expected in suburban Boston.

“As everyone is aware, there is a lot of [empty] inventory in the office and lab market space, which affects business travel. And with the Hynes being shut down off and on as renovations are done, this impacts seasonal demand,” MLA President and CEO Chris Pappas said following the event.

Data presented Wednesday showed that the Boston office and lab vacancy rate slightly increased between the fourth quarter of 2024 and second quarter of 2025 from 23.2 percent to 23.6 percent. In Cambridge during that period, the vacancy rate rose from 25 percent to 26.2 percent.

“There is also uncertainty with the economy in general that will limit discretionary spending. And of course, the hotels are seeing increased operational costs for labor, insurance, supplies, etc.,” Pappas added.

What Could Drive a Rebound?

The industry expects a “rebound” next year due to a number of “mega events” on the 2026 calendar, according to Pappas. Foxborough is slated to host seven FIFA World Cup matches next summer, Massachusetts will continue to celebrate its 250th anniversary and Tall Ships will return to Boston Harbor in July.

The collegiate football Navy v. Notre Dame faceoff was also listed as a “big event” in a Travel and Tourism presentation. The teams are slated to play at Gillette Stadium next October.

After a bump in international and domestic travel growth in 2024, Lodging Association data reported that 20.8 million passengers passed through Logan International Airport during the first six months of 2025 – an increase of 1.7 percent over that time in 2024.

International overnight and nighttime visits to Boston, however, were down by more than 10 percent in June, according to Meet Boston. Increases all around are projected for 2026, during which the industry is also eyeing an increase in international flight availability at Logan and the opening of three new hotels in Boston and Cambridge.

Boston Convention Marketing Center Executive Director Milt Herbert projected a 12,000-unit increase in convention center room night bookings by the end of 2025. Convention centers are reportedly seeing “record breaking” attendance and associated room nights at a pace they’ve never seen before, and convention business is seeing a “modest impact” from business and government policies, Herbert said.

One measure of the sustaining importance of convention travel: developer DGH Partners proposed a 438-room hotel tower across from the Menino Convention Center in March.

Tourism has reportedly declined this year across Massachusetts and the rest of New England. Gov. Maura Healey said in June during a meeting with Northeast governors and eastern Canadian premiers that Canadian tourism is down across northeastern states by between 20 percent and 60 percent.

Northeast and Canadian officials met at the State House to discuss disruptions in tourism, trade and relations between Canada and the U.S. President Donald Trump has proposed tariffs against Canadian materials and suggested that Canada become the “51st state” of the U.S.