NATIONAL REPORT – CBRE forecasts that RevPAR will grow a
stead 2.0% in 2025, as urban locations continue to outperform due to improved
group and business travel and continued recovery of inbound international
travel.
CBRE also forecasts occupancy will improve by 23 basis-point
(bps) and ADR will improve by 1.6%. This projected growth
indicates the continued recovery of the lodging industry, with RevPAR expected
to be 16.6% higher in 2025 compared with pre-pandemic levels in 2019.
CBRE’s baseline forecast includes a 2.4% GDP
growth rate and average inflation of 2.5% for 2025.
“The U.S. hotel market
is poised for steady growth in 2025, primarily led by continued outperformance
of the urban segment, which should experience RevPAR growth of 2.8% this year,”
said Rachael Rothman, CBRE’s head of Hotel Research & Data Analytics. “The
sector’s resilience and the sustained demand for higher-priced hotels bode well
for the upcoming year.”
With numerous events planned for the next few years,
including the 2026 FIFA World Cup held in the U.S., Mexico and Canada; the 2028
Summer Olympics in Los Angeles; and the United States’
250th anniversary in 2026, along with the ongoing
appeal of national parks, global gateway cities, and U.S. leisure destinations,
CBRE projects RevPAR growth within the 1.5% to 3.5% range over the next several
years, barring a recession.
“Despite existing cost pressures and the U.S. hotel market
fundamentals remaining robust, we anticipate a resurgence in investment
activity in the latter half of 2025,” said Bill Grice, president of CBRE Hotels
in the Americas. “With ample dry powder available and the potential for a lower
Fed funds rate before year-end, we expect to see a narrowing of buyer and
seller expectations, fueling increased transaction activity.”
CBRE expects restrained
supply growth due to high financing and construction costs, averaging less than
1% over the next three years. Potential additional tariffs, labor shortages or
the Fed pulling back on further interest rate reductions could temper supply
growth even more, enhancing pricing leverage and elevating replacement costs
for existing assets.