- Despite economic and geopolitical uncertainty, the U.S. hotel market saw a 0.4% year-over-year increase in occupancy rate in Q1, driven by a 1.0% growth in demand.
- Revenue per available room (RevPAR) rose by 2.2% due to a 1.9% increase in average daily rate (ADR) and a slight increase in occupancy.
According to CBRE’s Q1 analysis, the U.S. hotel market has shown resilience in the wake of economic and geopolitical uncertainties. The overall hotel occupancy rate increased by 0.4% year over year in the first quarter, with demand growth of 1% outpacing supply growth of 0.6%. In addition, average daily rates (ADR) saw a 1.9% rise, which, combined with the marginal increase in occupancy, resulted in a 2.2% increase in revenue per available room (RevPAR).
The first quarter also witnessed increased business travel, which was partially offset by a decrease of 11.6% in inbound international travelers in March. Despite this, the demand for alternative lodging options, such as short-term rentals and cruise lines, grew faster than traditional hotels. These alternatives saw demand growth of 45% and 9% respectively, from Q1 2019.
On the labor front, hotel wage growth matched the national average of 4% in Q1. However, job openings per hotel fell nearly 9% to 15 from 17. Meanwhile, occupancy rates for all location types continued to trail Q1 2019 levels, but except for resorts, all had increased occupancy year-over-year in Q1. Urban locations reached 92% of 2019 levels, whereas interstate locations were closest to pre-pandemic levels at 99.5%.
Special events and circumstances also influenced RevPAR growth in specific areas. The Super Bowl boosted RevPAR growth in New Orleans, while hurricane relief efforts bolstered Tampa’s RevPAR. Furthermore, Columbus, Washington, D.C., and West Palm Beach were among the top five RevPAR growth markets in Q1 2025, likely driven by demand due to the presidential inauguration.
Download the CBRE Q1 Analysis.
