Desert Hot Springs 2026 Hotel Market Outlook (by classification)

The bottom line is that Desert Hot Springs (DHS) should stabilize and expand in 2026. In 2025, it is anticipated that hotel performance throughout the valley will slightly improve due to a more packed events calendar (BNP Paribas Open, Coachella/Stagecoach), better air access into PSP, and ongoing demand for wellness travel that supports DHS’s mineral-spa niche. Independent forecasts indicate low single-digit ADR growth and flat to slightly higher occupancy throughout the Coachella Valley, with results differing by chain scale/class.

Demand peaks in the spring of 2026

Every year, events like the BNP Paribas Open (March 1–15, 2026), Coachella (April 10–12 & April 17–19, 2026), and Stagecoach (April 24–26, 2026) occur back-to-back, but their timing nevertheless generates several weeks of exceptionally high demand throughout the Valley.

These recurrent peaks usually indicate the following for desert hot springs:

Increased spillover occupancy as Indio and Palm Springs fill first.

reduced options for travelers, which gives them more pricing power.

Possibilities for premium packages with minimum length of stay, particularly for boutique spa properties.

Improvements in air access include the addition of several new/seasonal routes (such as American CLT–PSP Dec 2025–Apr 2026) and record/near-record passenger volumes at Palm Springs International Airport (PSP), which extended the inbound funnel for spring high season.

Wellness travel tailwinds: DHS’s hot-mineral-water resorts benefit structurally from the ongoing growth in wellness tourism and spa participation.

Local indicators are still strong: • The city’s TOT rate, which is a stand-in for lodging revenue, is 12%, and receipts have been increasing recently.
• The city’s budget documents and ACFR indicate that revenue growth is linked to tourism.

The new supply from Valley Pipeline is modest and oriented toward products that are mid- to upper-priced. To add branded capacity on the north end, DHS itself approved a 105-room Hampton Inn (select/limited-service) that could open in the 2026–2027 window.

Macro context: The national forecast also indicates slower, more competitive growth, so price discipline is important. California’s statewide lodging forecast predicts a soft 2025 followed by an event-boosted ADR lift in 2026.

How each hotel classification affects the forecast

Coachella Valley forecasts (CBRE Hotel Horizons Q2 2024) are used as a guide for 2026 in the benchmarks below. Although the direction of change is consistent, DHS properties generally index a little differently (smaller boutique spas and economy/limited-service are over-represented).

Upper-class/luxury (full-service, boutique mineral spa)

Forecast: RevPAR is up in the low-to-mid single digits, and there is a slight increase in occupancy with an ADR growth of about 2% to 3%. With an ADR growth of ~2%+, it is anticipated that “upper-priced” hotels in the valley will push occupancy higher in 2026. Wellness packages and festival-period pricing are viable options for DHS spa-forward boutiques.

Why: Wellness demand + premium willingness to pay during March–April peaks (BNP, Coachella/Stagecoach). Air access boosts shoulder-season weekends.

Key KPIs to manage: ADR index vs. valley luxury set; RevPAR; Spa revenue per occupied room (SPOR); ancillary capture (F&B/retail); length of stay around event weeks.

Upscale / Select-Service (e.g., Hilton Garden Inn-type; new Hampton Inn)

Outlook: Baseline improvement with occupancy near/just below valley mid-priced averages and ~3% ADR growth. New branded supply creates more price transparency; conversion of event demand should lift weekends.

Key KPIs: Corporate/crew mix in shoulder months; direct-booking share; event-week minimum-length-of-stay (MLOS) compliance; booking window (expect to compress slightly).

Limited-Service/Midscale

Outlook: As occupancy stabilizes, there will be steady rate-led RevPAR growth (~3–4%); the valley’s “mid-priced” forecast indicates modest occupancy increases and ~3% ADR growth in 2026. Price-conscious wellness seekers and overflow during busy weeks should be advantageous to DHS limited-service properties.

Important KPIs include the day-of-week mix (peaks on Thursday through Sunday), OTA share and expenses, and rate fences for high-compression nights.

The economy

Outlook: After 2025 softness, there will be a slight recovery; the valley “lower-priced” forecast indicates flat occupancy and a slight increase in ADR in 2026 (RevPAR slightly up). During the hot summer months, economy properties should compete on the basis of cleanliness, basic amenities, and clear pricing.

Price-value ratings, utility CPOR (summer power), and the number of housekeeping labor hours per OCC room are important KPIs.

Extended-Stay

Outlook: Resilient; benefits from project-based stays and price-sensitive travelers seeking kitchens. Expect steady occupancy, with ADR tracking midscale trends. Ancillary length-of-stay policies will be vital around March–April event weeks.

Numeric signposts for planning (2026, valley benchmarks)

All hotels: CBRE’s valley view shows 2026 as an incremental improvement year with RevPAR driven more by ADR than occupancy. (Use this as a pacing guardrail for your own budget.)
Upper-priced: Occupancy edges up and ADR rises ~2%+, implying low-single-digit RevPAR growth.
Mid-priced: Small occupancy gain and ~3% ADR growth—overall RevPAR +3–4%.
Lower-priced: Occupancy roughly flat with ~2–3% ADR growth—RevPAR ticks up slightly.

Calibrate these ranges to your comp set in DHS; spa-forward boutiques often outperform on ADR, while economy/limited-service in DHS can outperform on occupancy during peak events due to value positioning and proximity.
2026 classification-based action plan (what to do now)
Regarding luxury/boutique driven by spas:
During BNP/Coachella weeks, create experiential wellness bundles (mineral-water rituals + treatments + mindfulness classes) with 3-night MLOS; maintain price integrity and yield by room type.
Monitor therapist use, SPOR, and attachment rate; increase Monday–Wednesday offers to counteract weekend compression.
For select-service and upscale (including new flag):
Set the fenced festival rates in advance and lock in the crew and corporate base for the shoulder months.
Target CLT/East Coast and PNW origin markets with digital advertisements that use PSP route news (“Fly direct to PSP”).
For economy and midscale:
Gain value-seekers by offering clear pricing and flexible cancellation outside of peak times; use barbell pricing, which is aggressively priced and premium in March and April. From June to September.
Protect margins: use smart thermostats and water heating controls, and keep an eye on energy CPOR.

Risks & watch items

Macro softness/competition: Statewide forecast flags a soft 2025 base and competitive 2026; watch booking windows and be ready to pace-correct rates.
Extreme heat/smoke: Summer shoulder can wobble; lean into wellness day-passes and locals’ packages to backfill.
Event sensitivity: Festival weather or lineup shifts can move demand; protect with clear cancellation/MLOS and diversified channels.
Cost creep: 2026 wage step and utilities; build GOPPAR and flow-through targets into budgets.

KPI checklist for your 2026 dashboard

Market-facing: Occupancy, ADR, RevPAR; booking window, LOS, channel mix, web conversion.
Wellness (spa resorts): SPOR, treatment utilization, retail per occupied room.
Profitability: GOPPAR, labor CPOR, energy/water CPOR.
Events: Dedicated pacing for Jan (American Express PGA), Mar (BNP), Apr (Coachella/Stagecoach); set ceilings/fences 120–180 days out.

References

CBRE Hotel Horizons: Coachella Valley (Q2 2024) – occupancy/ADR/RevPAR forecasts and pipeline data.
Visit California / Tourism Economics lodging outlook (2025–26).
Visit Greater Palm Springs – confirmed 2026 event calendar (BNP Paribas, Coachella, Stagecoach).
Palm Springs International Airport (PSP) route announcements and passenger data.
City of Desert Hot Springs – TOT rate, budget/ACFR, and STVR TBID details.
Global Wellness Institute & ISPA – wellness travel growth data.
California Department of Industrial Relations – minimum wage schedule (2026).