U.S. hotel industry faces challenges as RevPAR declines, while global markets show reported same-store RevPAR outside the U.S. increasing by 6.8%.
U.S. Weekly RevPAR Decline
In the week ending 13 September 2025, the U.S. hotel industry experienced a notable decline in revenue per available room (RevPAR), despite the absence of calendar shifts that typically affect comparisons. The weekly RevPAR fell by 1.7%, marking the largest decrease in the past eight weeks. The primary driver of this decline was a drop in occupancy, while the average daily rate (ADR) remained largely unchanged with a marginal increase of 0.1%. This trend of declining occupancy has been persistent since April, with only two exceptions where occupancy did not fall.
Historically, the week following Labor Day has shown varied results. In 2019, RevPAR increased by 0.9%, while in 2022, it rose by a modest 0.4%. However, in 2024, there was a decline of 1.2%. The current year’s results were particularly disappointing given the historical context of similar calendar setups, such as in September 2014, when RevPAR grew due to rising demand and ADR.
Top 25 Markets Underperform
The RevPAR decline was most pronounced in the Top 25 Markets (T25), which experienced a 3.5% decrease, compared to a 0.2% decline in other markets. Six of these markets, including Orange County, Atlanta, Houston, Las Vegas, San Diego, and Washington, D.C., experienced double-digit declines in RevPAR. The weekday performance in these markets was particularly weak, with a 4.6% decline in RevPAR driven by a drop in occupancy. Houston and Las Vegas contributed significantly to this decline, with factors such as difficult comparisons from the previous year and changing economic conditions playing a role.
A decrease in group demand was a key factor in the weekday RevPAR declines in several markets, including Atlanta, Las Vegas, and Orange County. Overall, group demand across the U.S. fell by 5%, marking the 10th consecutive week of decline. Despite this, group ADR continued to rise, increasing by 3.2%, and has generally outpaced inflation throughout the year.
Regional Variations and Events
Outside the Top 25 Markets, some regions saw significant RevPAR growth. Columbia, SC, led the nation with a 44.2% increase, driven by an 83% increase on weekends. Other markets, such as Louisville, KY, and regions in Indiana, Wisconsin, and Mississippi, also reported strong growth, primarily due to events like college football games and festivals. In contrast, the Luxury hotel class continued to lead with a 2.2% growth in RevPAR, while the Economy class saw a decline of 6.3%.
Global Market Performance
Globally, hotel performance showed signs of recovery, with same-store RevPAR outside the U.S. increasing by 6.8%, driven by a 4.5% rise in ADR. Countries such as Italy, France, the U.K., and Japan reported significant RevPAR growth, with Italy leading the way at 20.4%. Milan stood out with a 59.4% increase in total RevPAR, primarily driven by ADR growth. However, Mexico faced challenges, with a 6.4% decline in weekly RevPAR, particularly in the Gulf of Mexico and Mexican Caribbean markets.
Outlook for September
The outlook for the remainder of September remains cautious. Despite a month-to-date RevPAR growth of 1.3%, the upcoming week is expected to be challenging due to Rosh Hashanah, which may impact weekday travel. Additionally, the comparison of day-matched data reveals a 1.2% decline in RevPAR, attributed to a decline in demand and a flat ADR. For September’s RevPAR to remain flat, it would need to increase by 0.7% daily over the next 17 days, which may prove difficult given recent trends.
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