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CBRE: RevPAR to grow 1.3 percent in 2025

The recent forecast assumes 1.4 percent GDP growth in 2025

CBRE: US Hotel RevPAR to Grow 1.3 Percent in 2025

U.S. hotel RevPAR is expected to grow 1.3 percent in 2025, driven by urban, drive-to and regional leisure demand, according to CBRE.

U.S. HOTEL REVPAR is expected to grow 1.3 percent in 2025, supported by urban markets from group and business travel and increased demand for drive-to and regional leisure destinations, according to CBRE. Occupancy is forecast to rise 14 basis points and ADR 1.2 percent year-over-year.

This represents slower growth than CBRE’s February forecast, which projected 2 percent RevPAR growth based on a 21-basis-point increase in occupancy and a 1.6 percent rise in ADR, the commercial real estate and investment firm said.


“Economic and geopolitical uncertainties aside, several factors will drive RevPAR growth in 2025. These include an uptick in group and business travel, along with a weaker U.S. dollar and lower airfares, which may encourage domestic travelers to stay closer to home while boosting inbound international visitation to the U.S.,” said Rachael Rothman, CBRE’s head of hotel research and data analytics. “These trends are expected to particularly benefit urban hotels, regional resorts and drive-to destinations.”

CBRE’s forecast is based on 1.4 percent GDP growth for 2025, down from 2.4 percent in February, and a 2.9 percent inflation rate, 40 basis points higher than earlier projected. Though slower, economic growth is expected to support the lodging industry’s performance.

CBRE projects RevPAR growth of 1 to 3 percent over the next few years. Events like the 2026 FIFA World Cup, the U.S. 250th anniversary, and the 2028 Summer Olympics will drive demand, along with a new Orlando theme park and other attractions. These, along with steady interest in national parks, gateway cities and domestic leisure destinations, are expected to sustain growth unless an economic downturn occurs.

Michael Nhu, CBRE’s senior economist and head of global hotels forecasting, said hotel demand and the economy are expected to grow more slowly, while supply growth will likely slow due to higher construction and financing costs and a tight labor market.

“This will enhance pricing leverage for hotel operators over the long term and benefit existing assets by increasing replacement costs,” he said.

The firm expects supply growth to average 0.8 percent annually over the next four years, half the industry's historical average. A decline in demand or a sharper-than-expected rise in construction costs could slow supply growth further.

The latest forecast includes 11 new leisure-focused markets such as Boulder, Colorado ski areas, California wine country, the Florida Panhandle and Utah national parks. The additions reflect recent travel shifts and highlight emerging opportunities.

CBRE recently reported 2.2 percent year-over-year RevPAR growth for the U.S. hotel industry in the first quarter, despite economic uncertainty.


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