Michigan consumer sentiment closed February at 56.6. Retail sales dropped 0.2% in January. PwC is projecting full-year RevPAR growth of 0.9%, STR has it at 0.6%. Both numbers assume a back-half acceleration that requires consumer confidence to recover. It hasn't. The real number here is the gap between those forecasts and what the macro data is telling you right now about Q2.

Let's decompose this. A sentiment reading below 60 historically correlates with contraction in discretionary travel spend. We've been below 60 for two consecutive months. 46% of survey respondents cited high prices as a direct strain on personal finances. That's not a confidence problem... that's a cash flow problem at the household level. When households are cash-constrained, the vacation doesn't get cancelled. It gets traded down. The family that was booking a full-service resort in Scottsdale books a select-service in Sedona instead. The couple that was doing four nights does three. The math on this is straightforward: full-service and luxury leisure properties absorb the loss, select-service and extended-stay properties absorb the demand. But "absorb" doesn't mean "profit." The traded-down guest arrives with traded-down expectations and traded-down ancillary spend.

I audited a management company once that showed 4% RevPAR growth during a sentiment downturn. Looked great on the quarterly report. The number they didn't show: F&B revenue per occupied room dropped 11%, spa revenue dropped 19%, and total ancillary contribution fell enough to wipe out the rate gain entirely. The hotel was busier and making less money. RevPAR told one story. GOP told another. If you're an asset manager looking at Q2 projections right now, RevPAR is the wrong metric. Flow-through is the metric. Cost to achieve that revenue is the metric.

The STR and PwC forecasts both assume sequential acceleration in H2 2026. That requires sentiment recovery, which requires inflation expectations to normalize (year-ahead expectations are still at 3.4%, well above pre-pandemic levels), which requires households to feel less squeezed. None of those conditions are trending in the right direction as of today. The base case in most operating budgets was built on assumptions that are now 60-90 days stale. A 5-8% miss on leisure demand in Q2 is not a stress scenario. It's the scenario the macro data is currently pricing.

For owners and asset managers running branded properties: your loyalty program is a partial hedge. Higher-income households (projected to drive $544 billion in leisure travel this year) are less sentiment-sensitive, and they over-index in loyalty programs. For owners of independent leisure properties with no loyalty cushion: the exposure is real and it's immediate. Your Q2 booking window is open right now. If forward pace is flat or declining versus prior year, do not wait for March actuals to confirm what February's macro data already told you. Reprice. Package. Protect margin. The confirmation will come. It'll just come too late to act on.