Note: Next week’s analysis will be brief with U.S. offices closed Thursday for Juneteenth. Look for an additional analysis on the upcoming Fourth of July holiday earlier in the week.
All financial figures in U.S. dollar constant currency.
Highlights
- Soft performance for the first week of June
- Weak weekdays across all chain scales, the reverse of prior week
- Global RevPAR slowed but still growing
- Japan continues growth streak with a boost from Expo
- U.S. bookings improving in the short-term
- Next week’s data will tell a lot about the direction of the summer
Last week’s analysis focused heavily on a lackluster weekend. This week, we show that weak performance shifting to the weekdays. Performance across the U.S. hotel industry was soft in the week ending 7 June 2025 with steep performance declines on Sunday followed by gradual, but still lagging, improvement throughout the week eventually ending with a flat weekend.
Mirroring the slowdown in hotel performance, TSA screenings produced the largest weekly decline of the year. It was a difficult comp to last year with conference shifts across top convention markets and a later end to many school calendars. As shown in STR’s School Break Report, there has been a lag in the number of students on break compared to last year. The gap will close in the next two weeks of data.
Regardless, another negative week adds to the rumblings around a slowdown in travel. However, the positive booking pace in our forward-looking data provides reassurance that travel is not coming to a halt just yet.
The weekend recovered but not enough to rescue the week
Revenue per available room (RevPAR) for the week retreated 3.2%, a function of occupancy falling 2.2 percentage points (ppts) and flat average daily rate (ADR). Sunday through Thursday averaged a RevPAR decline of 4.6%, while the weekend held almost steady with RevPAR at -0.3%.
The top four hotel chain scales in the Top 25 Markets (T25) saw the strongest weekend performance with Luxury hotels advancing the most followed at almost equal levels by the next three chains scales. Luxury hotels continued to post healthy weekend performance in cities outside the T25 as well.
Hotels in the other chain scales posted negative performance, ranging from -1% in Upper Upscale to worse than -6% in Economy—in both city markets outside the T25 as well as markets not dominated by one city.
Weekdays in the Top 25 Markets saw the largest declines with conference shifts and the later start to summer vacation having an impact. RevPAR declines ranged from -3% in Luxury to -9.2% in Economy. Weekday performance in all other markets was also down but not as steep as what was seen in the T25.
Weekend/Weekday seesaw across Top 25 Markets
Market performance fluctuates every week with shifting weekday and weekend events, but the most recent week was particularly jumpy with eight of the Top 25 Markets exhibiting extreme weekday/weekend fluctuations.
- Three markets with positive weekday RevPAR comps and a negative weekend were San Francisco, Atlanta, and New Orleans. Weekend losses in Atlanta and New Orleans reached double-digits and were primarily in each city’s central business district.
- On the flip side, six markets with a healthy weekend after weak weekdays were Chicago, Tampa, Las Vegas, Boston, Anaheim (Orange County) and Denver. Las Vegas’ weekday/weekend shift was the most dramatic with a 33.2% weekend RevPAR gain and a 23.9% weekday RevPAR loss.
- St. Louis was one notable exception with strong weekday and weekend RevPAR growth. St. Louis has seen double-digit RevPAR growth for the past three weeks due to several large conventions. In the most recent week, the city hosted two baseball series along with the Kendrick Lamar Grand National Tour. The latter was attended by more than 50,000.
Global RevPAR still up
Global RevPAR growth slowed after two strong weeks, however the measure remained positive at +3.2% largely on ADR. Excluding China, RevPAR was up 6.1%. Demand tells a different story, declining 1.9%. Even excluding China, demand declined 1.0%.
Japan excels
Across the key countries, Japan continues to be lifted by EXPO 2025, which runs through October. Demand rose 4.7%, while RevPAR advanced by nearly 40%.
India saw the largest demand increase (+6.7%) with RevPAR up 13.8%.
Spain was the only other country with positive demand and RevPAR comps.
Countries seeing the greatest declines were Indonesia, recovering from the devastating earthquake in March. France’s ADR fell across the country while demand held. China also saw a greater ADR decline (-7.4%) versus its demand decrease (-3.5%). The majority of its markets followed this pattern, with four of the five largest markets (Shanghai, Beijing, Jiangsu and Shandong) seeing demand decline at a faster rate than ADR.
Looking ahead
After two weeks of declining U.S. RevPAR, next week could serve as a turning point in understanding the direction of summer travel. June occupancy on the books has been up versus last year, and each week we see improvement in the year-over-year comp. A shorter booking window is a main contributor to that trend as economic uncertainty appears to be resulting in later travel decisions. Hence, the decreases we see in July and August are not yet alarming. This weekend also kicks off the FIFA Club World Cup. We’ll post analysis next week on the booking trends for the 11 host markets.
Economic indicators such as unemployment, business confidence and consumer confidence all reflect a stable outlook. Slowing TSA screenings are a concern; however this may be a function of travelers shifting to car travel and slowing outbound international travel due to the falling U.S. dollar.
Globally we anticipate a slower summer due to fewer blockbuster events such as the Olympics, Taylor Swift’s ERAs Tour, and EURO 2024. The falling U.S. dollar may slow the flood of Americans traveling overseas and U.S. immigration policies could possibly deter some foreign-born U.S. citizens, representing around 16% of the U.S. population, from traveling abroad.
About CoStar Group, Inc.
CoStar Group (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics in the property markets. Founded in 1987, CoStar Group conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of real estate information. CoStar is the global leader in commercial real estate information, analytics, and news, enabling clients to analyze, interpret and gain unmatched insight on property values, market conditions and availabilities. Apartments.com is the leading online marketplace for renters seeking great apartment homes, providing property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked online commercial real estate marketplace with thirteen million average monthly global unique visitors. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X offers a leading platform for conducting commercial real estate online auctions and negotiated bids. Homes.com is the fastest growing online residential marketplace that connects agents, buyers, and sellers. OnTheMarket is a leading residential property portal in the United Kingdom. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. Business Immo is France’s leading commercial real estate news service. Thomas Daily is Germany’s largest online data pool in the real estate industry. Belbex is the premier source of commercial space available to let and for sale in Spain. CoStar Group’s websites attracted over 163 million average monthly unique visitors in the third quarter of 2024. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time, we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.
This news release includes “forward-looking statements” including, without limitation, statements regarding CoStar’s expectations or beliefs regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that future media events will not sustain an increase in future occupancy rates. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar’s filings from time to time with the Securities and Exchange Commission, including in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2023 and Forms 10-Q for the quarterly periods ended March 31, 2024, June 30, 2024, and September 30, 2023, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar’s other filings with the SEC available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
