RI Hospitality - Industry Outlook 2026: Balancing Resilience and Caution
By Farouk Rajab, President/CEO, RI Hospitality Association (RIHA)
The RI Hospitality Association (RIHA) recently hosted its 22nd Annual Economic Outlook Breakfast at the Crowne Plaza Providence-Warwick, where national and local experts discussed the forces shaping the future of hotels, restaurants, and tourism in the state.
National Restaurant Association Chief Economist Chad Moutray noted that while the U.S. restaurant industry will grow in 2026, expansion will be slower and more uneven. Full-service restaurants remain short 233,000 workers compared to pre-pandemic levels, while costs for food, labor, rent, and insurance continue to climb. Off-premises dining now represents 73% of all restaurant traffic, reflecting a lasting consumer shift. Moutray noted that the economy remains the top concern for operators, and that restaurants are looking for efficiency wherever they can.
In Rhode Island, restaurant sales are projected to reach $1.5 billion in 2026. But both hotels and restaurants face rising costs that are outpacing revenues. Providence remains a standout in 2025, with occupancy up 6% year-over-year. Statewide occupancy is expected to remain flat in 2026 with modest gains in average daily rate and revenue per available room. Even when we think we are performing better than prior years, it is critical to be mindful that expenses growth is exceeding revenue growth.
Dr. Justine Oliva of the Rhode Island Public Expenditure Council shared that unemployment in Rhode Island has risen above regional and national averages, while labor force participation continues to decline. Still, the leisure and hospitality sector remains vital, making up 12.2% of the state’s workforce. Recent state data show 23 new businesses and nearly 600 additional jobs in the sector were lost over the past year.
Liz Tanner, Executive Director of Ocean State 2026, highlighted the FIFA World Cup coming to nearby Gillette Stadium, which is projected to attract nearly 892,000 visitors and generate $331 million in spending for Rhode Island. If Bryant University is chosen as a FIFA base camp, the state could see an additional 250,000 to 500,000 visitors.
Despite headwinds, Rhode Island’s hospitality industry remains resilient. Workforce shortages, rising costs, and shifting consumer behaviors present real challenges, but collaboration and innovation offer a path forward. Through advocacy, workforce training, and resources for employers, RIHA is committed to ensuring hospitality continues as one of the state’s strongest economic drivers in 2026 and beyond.