The U.S. hotel industry experiences a fourth consecutive week of declining revenue per available room (RevPAR), while Japan and Canada show strong growth in the global market.
U.S. Hotel Industry Trends
The U.S. hotel industry reported a continued decline in revenue per available room (RevPAR) for the week ending 19 July 2025, marking the fourth consecutive week of decreases. RevPAR fell by 3.3% year over year, slightly improving from the previous week’s 3.7% drop. The primary contributors to this decline were a 1.8% decrease in room demand and a 0.7% drop in the average daily rate (ADR). Despite a modest 0.8% increase in room supply, weekly occupancy fell by 1.9 percentage points to 71.6%.
The most significant RevPAR declines were observed in major metro markets, with the Top 25 Markets experiencing a 4.3% decrease and other metro markets seeing a 4.7% drop. Las Vegas, Houston, and Los Angeles were the primary drivers of this negative trend. Las Vegas experienced a 17.1% decline in RevPAR, primarily due to reduced international arrivals and the economic impact on lower-income households. Houston experienced a 38.3% drop due to tough comparisons with last year’s demand spikes from Hurricane Beryl and the “Derecho.” Los Angeles faced an 8.9% decline, with the Central Business District experiencing a 17.8% drop amid market tensions.
Impact on Different Market Segments
Excluding the three major markets of Las Vegas, Houston, and Los Angeles, the U.S. RevPAR would have declined by a lesser amount, at 1.9%. ADR, excluding these markets, was down by 0.2%, remaining below the rate of inflation. In the Top 25 Markets, RevPAR was relatively flat at -0.6%, with a 1.0% increase in ADR when excluding these markets.
Metro markets outside the Top 25 saw the largest RevPAR decline, at 4.7%, accompanied by a 2.8% decrease in ADR. Non-metro and rural markets also experienced decreases, primarily due to a 1.0 percentage point drop in occupancy. Since Memorial Day weekend, summer demand has decreased by 1.6 million room nights, or 0.7%, compared to the previous year, with ADR remaining flat at 0.1%. The Luxury segment was the only chain scale to see RevPAR growth, though demand increased in all scales except Economy and Independents.
Global Market Performance
Globally, RevPAR, excluding the U.S., increased for the third consecutive week, with a 0.5% rise driven entirely by ADR. Although occupancy fell by 1.3 percentage points compared to last year, it reached the highest level of the year at 72.2%. Japan maintained its top RevPAR position, with Osaka leading the gains, driven by the EXPO 2025 event. Canada posted the second-highest RevPAR gain, with ten of its 22 markets experiencing double-digit increases. Spain and the U.K. also showed strong performance, driven by significant events and increased travel.
Conversely, France and Germany experienced declines due to shifts in sporting event calendars, while China’s RevPAR fell by 6.7%, with significant declines in Beijing and Guangzhou.
Outlook
The U.S. hotel industry faces a mix of positive and negative signals moving forward. Analysts anticipate nuanced interpretations of performance data due to tough year-over-year comparisons, particularly in September and October, following the impacts of hurricanes Helene and Milton. Sociopolitical factors are also expected to affect short-term demand in select markets. Despite current challenges, American Airlines CEO Robert B. Isom expressed optimism, predicting that July will mark the low point, with performance expected to improve sequentially each month as demand strengthens.
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