U.S. Hotel Industry Facing Setbacks, Global Market Thriving

For the week ending 15 March 2025, the U.S. hotel industry saw a 4.2% year-on-year decline in revenue per available room (RevPAR) due to decreased occupancy and conference shifts. In contrast, the global hotel industry, excluding the U.S., witnessed a RevPAR gain of 3.3% due to a strong average daily rate (ADR).

The U.S. hotel industry experienced a decline in the week ending 15 March 2025, with a 4.2% year-on-year drop in RevPAR, mainly due to a 2.3% decrease in occupancy. The report attributes this to various conference calendar shifts and a later spring break schedule for K-12 students. The two shoulder days of the week (Sunday and Thursday) suffered the most significant RevPAR drop of over 7%.

Specific cities like Houston and San Francisco, hosting major events, observed a double-digit RevPAR gain. However, Anaheim, Seattle, Minneapolis, and Orlando saw significant RevPAR declines due to shifts in event schedules.

Hotels across all chain scales experienced a decline in RevPAR, with the middle four tiers witnessing the sharpest drop. Luxury hotels reported a slight RevPAR decrease, cushioned by strong ADR gains.

The top 25 Markets saw a larger decline in transient demand than the rest of the country, while non-Top 25 Markets were responsible for a group demand slowdown.

Hotels near the U.S. borders with Canada and Mexico also witnessed a pronounced decline in demand over the past week.

On a global scale, excluding the U.S., occupancy fell by 1.2 percentage points, but ADR rose by 5.3%, resulting in a 3.3% gain in RevPAR. Countries such as Mexico and Japan saw the most substantial gains, primarily due to a boost in ADR.

STR concludes that the U.S. hotel industry will need to be patient for the spring season to kick in, while globally, ADR is expected to continue its upward trend as occupancy rates stabilize.

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