Overview of U.S. Hotel Industry Performance
In the week ending August 23, 2025, the U.S. hotel industry experienced a 1.3% decrease in revenue per available room (RevPAR), marking the third consecutive week of decline and the tenth drop in the past twelve weeks. The downturn was primarily driven by a decrease in occupancy, accompanied by a slight decline in the average daily rate (ADR) of 0.2%. The Top 25 Markets were largely responsible for this decline, with a RevPAR drop of 3.8%, while all other markets saw a modest increase of 0.4%.
Impact of Key Markets: Chicago and Houston
Chicago and Houston were significant contributors to the national decline in RevPAR. In Chicago, compared to the week of last year’s Democratic National Convention, RevPAR dropped by 19.9% due to a 22.3% fall in ADR, despite a 2.2 percentage point increase in occupancy. The central business district (CBD) of Chicago, the largest submarket, saw occupancy rise to 76.9%, although it also faced the most significant ADR impact from last year’s convention. Other submarkets, such as Chicago O’Hare Airport and Chicago Southwest, shared in the ADR and RevPAR declines.
Houston faced challenges from difficult comparisons to last year, when spring storms increased room demand significantly. Demand in Houston was down 29.5% this year, compared to a 32% increase last year. The Midscale and Economy class hotels in Houston were particularly affected, with RevPAR dropping by more than 50% over the past four weeks. It is anticipated that these challenging comparisons will ease in the coming weeks, although a performance drag is expected to persist until the end of the year.
Luxury Class Growth Amidst Broader Decline
Despite the overall downturn, luxury class hotels have continued to experience growth in RevPAR, a trend that has been consistent over the past four weeks. In contrast, the Upper Upscale class saw declines primarily due to lower occupancy, while other classes faced decreases driven by falling ADR. In the Top 25 Markets, excluding Houston and Las Vegas, all classes except Luxury still experienced declines, albeit to a lesser extent.
Global Markets Show Positive Trends
Globally, RevPAR increased by 5.4% for the second consecutive week, following four weeks of lower growth. This improvement was partly due to overcoming the Olympic comparison in France, where RevPAR rose by 24% this week. Over the past four weeks, countries such as Spain, Italy, Canada, Japan, and the United Kingdom reported RevPAR increases exceeding 5%, with Spain leading the pack. Notably, all these countries, except Italy, maintained occupancy rates above 80%.
Canada has demonstrated consistent growth, with RevPAR increasing in 24 of the past 34 weeks, primarily driven by ADR growth. In the most recent week, Canada’s RevPAR was up by 5.2%, continuing a trend of over 4% growth in May, June, and July, with similar expectations for August.
Calendar Impacts on Future Performance
The calendar changes in August and September are expected to impact hotel performance results. August will conclude with an additional Sunday, which, combined with current weaknesses, suggests a potential RevPAR decrease similar to July’s figures, despite anticipated record-breaking travel over the Labor Day holiday. Additionally, September will be affected by the shift of Rosh Hashanah into the month from October last year, leaving only two “clean” weeks for group and business travel.
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