Skip to content

Search

Latest Stories

LARC: RevPAR to rise 3.1 percent in 2025

U.S. hotel EBITDA is expected to rise 1.8 percent this year as well

U.S. hotel RevPAR rising to $103.02 in 2025

Lodging Analytics Research & Consulting projects U.S. RevPAR to rise 3.1 percent to $103.02 in 2025, driven by a 3.7 percent ADR increase to $164.54 and a 0.6 percent occupancy decline to 62.6 percent.

Photo credit: LARC

U.S. REVPAR IS projected to rise 3.1 percent to $103.02 in 2025, driven by a 3.7 percent ADR increase to $164.54 and a 0.6 percent occupancy decline to 62.6 percent, according to Lodging Analytics Research & Consulting. U.S. hotel EBITDA is expected to grow 1.8 percent with slight margin erosion, while hotel values rise 3 percent.

LARC attributes 2024 RevPAR growth acceleration to election tailwinds, improving group trends, and easing domestic leisure headwinds, while projecting an 8 percent increase in hotel values over five years.


“Our 2025 operating outlook has slightly improved from a quarter ago,” said Ryan Meliker, LARC’s president. “The most significant change is growing confidence that leisure demand has bottomed out, with growth set to resume in 2025, along with continued modest growth in the corporate transient segment. This translates to higher ADR growth, but occupancy will be lower, primarily due to difficult comparisons from disaster relief efforts in the fourth quarter. Our value appreciation forecast also improves, tied to an improving long-term cash flow outlook.”

The first and third quarters will see the strongest growth, while the fourth quarter will be softer due to tough disaster relief comparisons in the Southeast and Texas.

Market forecasts


Photo credit: iStock

  • Top markets for 2025 RevPAR growth are Maui, Hawaii; San Francisco; Palm Beach, California; San Jose, California; and Savannah, Georgia.
  • Bottom markets for 2025 RevPAR growth are Houston, Cleveland, Chicago, Las Vegas, Milwaukee

Five-year outlook: 2024-2029

  • Top markets for RevPAR growth are Raleigh, North Carolina; Orlando, Florida; Maui; Palm Beach; and Washington, D.C., with projected 2029 inauguration impact.
  • Bottom markets for RevPAR growth are Cincinnati; Kansas City, Kansas/Missouri; Indianapolis; Houston; and Louisville, Kentucky.
  • Top markets for value change are Puerto Rico; Charlotte; North Carolina; New Orleans; Salt Lake City; and Orlando.
  • Bottom markets for value change are Austin, Texas; Boston, Chicago, St. Louis and Portland, Oregon.

Sluggish growth

U.S. economic growth slowed in the fourth quarter of 2024, with real GDP rising 2.3 percent, down from 3.1 percent in the third quarter. Despite this, U.S. RevPAR growth accelerated 3.6 percent year over year, driven by increased demand from natural disaster relief and pent-up demand following the swift resolution of the U.S. general election.

“Corporate transient demand is expected to remain solid in the near term as pent-up demand from the election cycle is unlocked in the first half of the year,” Meliker said. “However, our positive short-term outlook for corporate transient demand growth moderates as the year progresses, limited by sluggish job growth and declining corporate profits. Group trends remain strong, contributing to a base level of demand that will further support pricing power. Nationally, we estimate the convention center booking pace will be up 4 percent year over year in 2025, following a 3 percent increase in 2024.”

In 2024, outbound international travel was 21 percent above 2019 levels and up 9 percent year over year, with 13 million more U.S. travelers than in 2019. Meanwhile, inbound travel remained 8 percent below 2019 levels but rose 9 percent year over year, with 5 million fewer foreign visitors than in 2019.

The U.S. shifted from a net importer of 5 million travelers in 2019 to a net exporter of 14 million in 2024—an 18 million traveler swing that is weighing on hotel performance, especially in gateway markets, LARC said.

Rising expense pressures

Meliker said expense pressures will be a substantial factor in identifying market winners and losers, especially in major cities with recent or upcoming collective bargaining negotiations.

“In recent agreements nationwide, the hotel union and hotel owners/operators agreed to roughly a 10 percent annual wage increase over the next five years and a reset to pre-pandemic staffing levels,” he said. “We expect non-union hotels to keep pace with wage growth at union properties in these markets, though many already pay above union-mandated levels.”

With added political risks like New York City's Safe Hotels Act potentially expanding to other markets, wage and expense growth will likely impact value more than top-line performance, LARC said. Their strain on margins heavily influences the investment outlook on the best and worst markets.

U.S.-Canada trade tensions are impacting tourism, with Canadian drive-in visits to the U.S. down 23 percent year over year in February, the second consecutive monthly decline and only the second since March 2021.

More for you

Marriott Outdoor Collection

Marriott unveils 'Outdoor Collection'

Summary:

  • Marriott launches Outdoor Collection and Bonvoy Outdoors platform.
  • First two brands are Postcard Cabins and Trailborn Hotels.
  • Platform features 450+ hotels, 50,000 homes and activities.

MARRIOTT INTERNATIONAL RECENTLY launched the brand “Outdoor Collection by Marriott Bonvoy” and introduced “Marriott Bonvoy Outdoors,” a digital platform that lets travelers plan trips by destination or activity. The first two brands in the Outdoor Collection are Postcard Cabins and Trailborn Hotels.

Keep ReadingShow less
Peachtree adds six hotels to its third-party management platform
Photo credit: Peachtree Group

Peachtree picked to manage six hotels

Summary:

  • Peachtree adds six hotels to third-party platform.
  • Five are owned by La Posada Group, one by Decatur Properties.
  • Third-party portfolio totals 42 hotels.

PEACHTREE GROUP’S HOSPITALITY management division added six hotels to its third-party management platform. Five are owned by La Posada Group LLC and one by Decatur Properties Holdings.

Keep ReadingShow less
AHLA Foundation scholarships

AHLA Foundation awards $710K in scholarships

Summary:

  • AHLA Foundation distributed $710,000 in scholarships to 246 students.
  • Nearly 90 percent of recipients come from underrepresented communities.
  • The foundation funds students pursuing education and careers in the lodging sector.

AHLA FOUNDATION DISTRIBUTED $710,000 in academic scholarships to 246 students at 64 schools nationwide for the 2025–2026 academic year. Nearly 90 percent of recipients are from underrepresented communities, reflecting the foundation’s focus on expanding access to hospitality careers.

Keep ReadingShow less
U.S. government shutdown
Photo by Kevin Dietsch/Getty Images

Congressional deadlock shutters government

Summary:

  • The U.S. government shut down at midnight after Congress failed to agree on funding.
  • About 750,000 federal employees will be furloughed daily, costing $400 million.
  • Key immigration and labor programs are halted.

THE FEDERAL GOVERNMENT shut down at midnight after Republicans and Democrats failed to agree on funding. Disputes over healthcare subsidies and spending priorities left both sides unwilling to accept responsibility.

Keep ReadingShow less
WTTC travel report

WTTC: U.S. tops travel sector with $2.6T GDP

Summary:

  • The U.S. led global travel and tourism in 2024 with $2.6 trillion in GDP, WTTC reported.
  • India retained ninth place with $249.3 billion in GDP.
  • The sector supported 357 million jobs in 2024, rising to 371 million in 2025.

THE U.S. LED global travel and tourism in 2024, contributing $2.6 trillion to GDP, mainly from domestic demand, according to the World Travel & Tourism Council. Europe accounted for five of the top 10 destinations, while India ranked 9th.

Keep ReadingShow less