For 2025, occupancy has been reduced by 0.2 percentage points to 62.3%. Average daily rate (ADR) projections remain unchanged at +0.8%, while RevPAR has been downgraded by 0.3 percentage points to -0.4%. The industry has not seen full-year RevPAR declines since 2020 and 2009, underscoring the significance of the revised figures.
Forecast adjustments for 2026 follow a similar pattern, with occupancy lowered by 0.3 percentage points, ADR by 0.1 points, and RevPAR by 0.3 points.
“We expect little change in the macroeconomic environment as unemployment and prices continue to rise,” said Amanda Hite, STR president. “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.
From the demand side, Aran Ryan, director of industry studies with Tourism Economics, noted ongoing headwinds including job market softening, policy uncertainty, and tariff costs, which continue to weigh on consumer sentiment. He added: “However, heading into 2026, we expect the U.S. travel economy to firm up moderately. 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.”
Beyond topline performance, cost escalation remains a significant concern. “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 explained. She added that labor costs are expected to rise slightly next year, notably due to the labor-intensive nature of F&B operations.
For hotel owners, operators and investors, the latest downgrade reinforces expectations of tighter margins and slower revenue growth, with greater reliance on cost management and operational efficiencies to navigate the upcoming cycle.
Tags: Amanda Hite, STR, CoStar Tourism Economics U.S. hotel forecast
