- The global hotel industry is experiencing varied performance across regions, with significant differences in RevPAR growth forecasts.
- Economic factors, geopolitical tensions, and competition from alternative lodging are influencing hotel market dynamics worldwide.
The global hotel industry is navigating a complex landscape in 2025, characterized by regional disparities in performance and growth prospects. CBRE delves into the key trends and projections for the hotel sector across various regions, highlighting the factors that influence these variations.
Americas Hotel Performance & Key Macroeconomic Indicators as a % of 2019
Source: CoStar, CBRE Hotels Research, Oxford Economics, International Air Transport Association.
United States: A Challenging Environment
The U.S. hotel market is facing headwinds, with CBRE revising its 2025 RevPAR growth forecast to a mere 0.1% from an earlier estimate of 1.8%. This downward adjustment is attributed to several factors, including a decline in occupancy rates and economic uncertainties stemming from trade tensions and geopolitical issues. The proliferation of alternative lodging options and rising operating costs are further pressuring hotel margins.
Canada: Resilient Despite Trade Tensions
In contrast, Canada is expected to experience a 2.4% increase in RevPAR, buoyed by strong inbound travel from the U.S. and robust domestic tourism. Despite rising trade tensions, the Canadian hotel market remains resilient, supported by balanced supply and demand dynamics and moderate ADR growth.
Northern Latin America: A Tourism Upswing
Northern Latin America is experiencing a dynamic upswing in tourism, with countries such as Mexico, Costa Rica, Colombia, and the Dominican Republic showing strong performance. Significant hotel development projects and strategic investments in tourism infrastructure are driving growth in this region. Mexico, in particular, is leading the charge with a notable increase in international tourist arrivals.
Europe: Steady Growth Amidst Challenges
Europe’s hotel industry continues to grow, albeit at a more measured pace. RevPAR is projected to increase by 2% to 5% in 2025, supported by rising international tourist arrivals. However, the region faces challenges such as slower recovery in travel from mainland China and delays in hotel development projects in the U.K. and Germany.
Middle East: Strong Performance with Strategic Initiatives
The Middle East, particularly the UAE, is experiencing robust growth in the hotel sector. Abu Dhabi and Dubai are leading the way with significant RevPAR improvements, driven by strong exhibition seasons and the introduction of new leisure attractions. Strategic initiatives, such as Abu Dhabi’s Stopover program, are enhancing the region’s appeal to international visitors.
Asia-Pacific: Diverse Market Dynamics
The Asia-Pacific region is witnessing a 9% increase in international tourist arrivals, with Japan, Vietnam, and Korea leading the growth. While ADR growth has slowed, occupancy rates continue to rise. Japan’s hotel market is benefiting from record tourism inflows, while Korea’s ADR is supported by continued tourism growth. However, challenges remain in mainland China, where ADRs have stagnated due to limited inbound demand.
Key Takeaways
The global hotel industry in 2025 is marked by regional variations in performance, influenced by a myriad of economic, geopolitical, and competitive factors. While some regions are experiencing robust growth, others face challenges that require strategic adaptation. Hotel operators and asset managers must navigate this complex landscape by optimizing channel mix, investing in guest-facing services, and maintaining high service standards to remain competitive.
Discover more at CBRE.
