Job market softening, policy uncertainty and tariff costs
remain near-term drags, while 2026 is expected “firm up moderately.”
NATIONAL REPORT – CoStar and Tourism Economics have further
downgraded performance projections in the final U.S. hotel forecast revision of
2025, as well as for 2026.
For 2025, occupancy was lowered 0.2 percentage points to 62.3%, while average
daily rate (ADR) was maintained at +0.8% for the year. Revenue per available
room (RevPAR) was downgraded 0.3 ppts to -0.4%. The last total-year RevPAR
declines in the U.S. occurred in 2020 and 2009.
Similar adjustments were made for 2026: occupancy (-0.3 ppts), ADR (-0.1 ppts)
and RevPAR (-0.3 ppts).
“We expect little change in the macroeconomic environment as unemployment and
prices continue to rise,” said STR President Amanda Hite. “As a result, our
hotel performance outlook for the remainder of this year and next were lowered
once again. ADR is growing well below the rate of inflation, which in turn will
put more pressure on margins.”
“Job market softening, policy uncertainty, and tariff
costs remain near-term drags for consumers. However, heading into 2026, we
expect the U.S. travel economy to firm up moderately,” said Aran Ryan,
director of industry studies with Tourism Economics. “Household income
growth will continue, accompanied by tax cut benefits, resumed hiring, and less
policy instability. Expanding global long-haul travel and World Cup interest
will bring improved international visitation.”
“GOPPAR projections have been lowered from our previous
forecast, with the decrease in 2025 being mainly due to higher expenses,
especially in the F&B department, as well as increased costs in other
operated departments, marketing, and utilities,” Hite said. “Labor costs will
be slightly higher in 2025, likely due to the increase in the aforementioned
F&B department, which is traditionally more labor-intensive.”