Familiar refrain related to economic
uncertainty, impact of increased expenses causes CoStar, Tourism Economics to
cut GOP expectations.
NATIONAL REPORT – Given continued underperformance and
elevated macroeconomic concerns, CoStar and Tourism Economics further
downgraded 2025 growth projections across the top-line metrics: demand
(-0.6ppts), ADR (-0.5 ppts) and RevPAR (-1.1 ppts).
In a revised 2025-26 U.S. hotel forecast just released at the
17th Annual Data Conference, similar adjustments were made for 2026: demand
(-0.5 ppts), ADR (-0.3 ppts) and RevPAR (-0.7 ppts).
“Unrelenting uncertainty and inflation, coupled with tough
calendar comps and changing travel patterns, have caused lower demand,” said
Amanda Hite, STR president. “Additionally, as the year has unfolded, we’ve seen
rate growth converge closer with demand. We expect little change in the
economic outlook over the next 18 months, but we are optimistic that once trade
talks have concluded and the impact of the budget reconciliation bill comes to
fruition, hotel performance will recover.”
“The slowing U.S. economy should absorb the effects of
tariffs without tipping into a recession,” said Aran Ryan, director of industry
studies at Tourism Economics. “The current environment—characterized by slowing
consumer spending, reduced business capital spending, and declining
international visitation—will transition to one boosted moderately by tax cuts
and less policy uncertainty as we look to 2026.”
Hite added, “While our GOPPAR forecast remains unchanged
from the previous revision, GOP margins were revised down 0.3ppts for 2025 and
2.3ppts for 2026, mainly due to a potential increase in expenses, particularly
F&B.”