Colliers has released its 2025 Hospitality Outlook, reporting continued recovery in the U.S. hotel industry. The analysis shows gains in key financial indicators and highlights investor opportunities in selected regions, with rising room rates and steady demand.
Between April 2024 and March 2025, U.S. hotels saw revenue per available room increase 2.4%, average daily rates rise 1.9%, and a slight uptick in occupancy. The report notes that while some regions have not reached pre-pandemic levels, others are nearing previous cyclical peaks.
The Northeast and Central regions led in occupancy growth at 1.3%. Colliers cited cities such as New York, Chicago and Nashville as benefiting from both leisure and business travel. The South now accounts for more than 51% of all rooms under construction, driven by travel demand and investor interest in the Sun Belt. In the West, average daily rates are about 20% above pre-pandemic levels. According to Colliers, hoteliers there are focusing on pricing rather than occupancy gains.
“We’re seeing performance diverge by region and asset type, which is creating targeted opportunities for investors who understand how to navigate today’s complexity and capitalize on long-term fundamentals,” said Mark Owens, vice chair, capital markets, Colliers.
The report also notes a small decrease in consumer travel spending. Lodging dropped 2.5% while airfare fell 6% year-over-year. Colliers said international travel could face short-term issues due to broader economic conditions, especially in major gateway cities. However, strong domestic demand for leisure and group travel continues to support overall performance.
Although new hotel supply remains active in certain markets, the report says higher development costs and tighter lending conditions are slowing growth in others, helping bring supply and demand closer to equilibrium.
Colliers concludes that the sector is entering a more strategic and selective phase. It adds that investors, developers and operators will need to weigh near-term trends against long-term prospects. The report cites changes in traveler behavior and hotel roles in mixed-use developments as part of how the sector is helping shape the broader real estate market.
