What the Numbers Tell Us About 2027 - November 2026
By Farouk Rajab, President/CEO, RI Hospitality
Every day, operators make decisions based on guest spending habits, staffing levels, supply chain pressures and food costs, all of which can shift quickly and directly affect the bottom line. That is why RI Hospitality’s annual Economic Outlook Breakfast remains so important. It helps operators understand the trends shaping the year ahead and make informed decisions.
Restaurant demand remains resilient across the U.S. The National Restaurant Association projects restaurant and foodservice sales growth of 4.3% in 2026 and 4.8% in 2027.
But sales growth does not tell the whole story.
Nationally, one-third of restaurant operators reported that they were not profitable during the first half of 2026. For businesses managing higher costs for food, labor, insurance, and other operating expenditures, continued consumer demand and the corresponding sales growth are important, but do not guarantee profitability when expenses are rising just as quickly.
Rhode Island’s economy presents a similarly mixed picture. The state’s unemployment rate fell to 3.9% in July, slightly below the national rate of 4.1%, but employers are not necessarily finding it easier to hire. Labor force participation, which measures those who are either working or actively looking for work, has now declined for eight consecutive quarters, while leisure and hospitality employment fell by 1,600 jobs during the second quarter. For hospitality employers, the challenge is clear: with relatively low unemployment and a shrinking labor pool, it’s harder to recruit and retain the workers businesses need.
The Rhode Island Department of Labor and Training projects nearly 11,000 leisure and hospitality job openings each year through 2034, with about 97% expected to come from people leaving the workforce or moving to other occupations. That challenge is compounded by an aging workforce, with employees aged 55 and older accounting for 16% of Rhode Island accommodation and foodservice employment in 2025, compared with just 5% in 1995.
That makes workforce development a priority. RI Hospitality and the RI Hospitality Education Foundation will continue working to attract people to the industry, build skills and create clear career pathways.
The lodging outlook also shows why statewide averages rarely tell the whole story. Statewide revenue per available room, or RevPAR, is projected to increase 5.9% in 2026, driven largely by a 5.2% increase in average daily rates, while occupancy is expected to rise just 0.7%. Coastal Rhode Island has been particularly strong, with RevPAR on pace to finish the year up 12.9%, while Providence and Warwick are expected to end 2026 slightly below last year’s levels.
The outlook becomes more balanced in 2027. Statewide RevPAR is projected to grow another 2.8%, including 3.2% growth along the coast and 2.5% in Providence and Warwick. That expected improvement is encouraging, particularly for markets that have faced a more challenging 2026, but it also reinforces the importance of watching both sides of the equation. Higher room rates can support revenue growth, but operators still have to manage labor, insurance, utilities and other expenses carefully to turn that growth into stronger bottom-line performance.
Food costs will require the same attention. Beef supplies are expected to remain tight and prices elevated, while pork may offer more flexibility and cheese and butter pricing could provide some relief.
None of these trends exists on its own. Workforce pressures affect costs. Food prices affect margins. Consumer confidence affects traffic. Hotel demand varies by market.
Success in hospitality requires adaptability. We may not know every change that 2027 will bring, but RI Hospitality is here to make sure our members have the information, resources and support they need to adapt. The more clearly we understand what is happening around us, the better prepared we are to meet it.