U.S. hotels hit a record Q1 RevPAR of $92, up 2.2% year over year, with March setting an all-time high, JLL reports
May 15, 2025
Despite economic uncertainty, U.S. hotels posted record-breaking performance in Q1 2025, with RevPAR rising 2.2% year-over-year to $92 — the highest Q1 figure ever, driven by strong average daily rates (ADR). However, occupancy declined due to weaker budget leisure travel, and international arrivals also slowed. Still, investor interest in hotels remained strong, supported by limited new supply and continued lender confidence, according to JLL’s Q1 2025 U.S. Hotel Investment Trends Report.
Key takeaways
- Record RevPAR despite headwinds: Q1 2025 RevPAR hit an all-time Q1 high at $92, despite economic caution and declining occupancy.
- Urban & group travel recovery: Urban hotels saw the strongest gains, fueled by corporate and group travel; events continued to support growth.
- Investor preference for mid-sized deals: Liquidity was driven by mid-sized urban transactions as investors favored central business districts and resort markets.
- Bifurcation persists: Premium hotel segments outperformed; economy hotels saw a 5.7% YoY RevPAR drop, despite being up 1.9% over Q1 2023.
- Select-service in focus: Select-service and extended stay hotels dominated Q1 transactions and are seen as resilient assets in volatile markets.
- Loan maturities to boost deals: With $145B in hotel loans maturing by 2026, transaction activity is expected to stay strong.
- Supply constraints support pricing: Limited new hotel supply and tariffs may help maintain strong performance in 2025.
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