- The U.S. hotel industry has reported an upward swing of 3.1% in revenue per available room (RevPAR), driven by an increase of 2.7% in the average daily rate (ADR).
- The recovery from wildfires in Los Angeles and hurricanes in several U.S. markets are influencing both ADR and occupancy growth rates, although their impact is starting to diminish.
The U.S. hotel industry experienced a 3.1% boost in RevPAR, largely driven by an increase of 2.7% in ADR, even as occupancy rates remained steady. Weekdays showed the strongest growth, aided by ADR, followed by shoulder days and weekends.
The recovery from the Los Angeles wildfires and 2024 hurricanes have contributed to ADR and occupancy gains, but their impact is gradually diminishing. The Los Angeles wildfire impact was mainly focused in three submarkets showing elevated performance. The 13 markets still recovering from the hurricanes saw a rise in RevPAR by 12.3%.
Mardi Gras celebrations gave New Orleans the top spot this week with a 30.6% increase in RevPAR. Tampa followed with RevPAR growth of 19%, boosted in part by the start of Major League Baseball’s spring training season.
However, political tensions and tariffs against Canada will likely influence travel flows from Canada to the U.S., with several Canadian border regions already witnessing sharp declines in hotel room demand.
On an international level, global occupancy slowed to 64.3%, with ADR rising by 3.4%. Italy, Japan, and Mexico experienced double-digit growth in RevPAR, partly driven by ADR growth. Italy’s strong performance was partly boosted by Milan’s annual Fashion Week.
The start of the spring break season is expected to lift demand in spring break markets. The hospitality industry will also likely see the impact of the new administration’s policies on cross-border travel, and the effects of the 2024 Total Solar Eclipse.
