ATLANTA, Georgia—The Hotel Profitability Performance Report for Q3 2025 has been released on HotelData.com, highlighting how U.S. hotels have shifted strategies to protect profit margins despite revenue performance falling short of budget expectations.
Year to date to September 30, 2025, hotels saw revenue underperform budget expectations, with actual RevPAR averaging 9 percent below budget at $119.22. However, GOP margins held steady at 37.7 percent, just 1.2 points below target. The results pointed to sharper operational control, with hoteliers tightening forecasts and managing labor and costs more precisely to offset slower demand and rising expenses.
The report showed how operators have adjusted forecasts, tightened operations, and focused on protecting margins as demand softens and costs continue to rise. The findings pointed to a clear industry pivot, with hoteliers relying less on rate growth and more on disciplined cost control, smarter labor strategies, and sharper forecasting to stay profitable. The Hotel Profitability Performance Report drew on aggregated data from thousands of hotels across the United States, utilizing Actabl’s operational and financial platforms.
“The story of Q3 is one of operational resilience and shows how hotel leaders are adapting to new realities,” said Sarah McCay Tams, head of editorial at Actabl. “Hoteliers started the year with ambitious revenue expectations, but market realities forced a recalibration. Operators are now focused on the fundamentals, like forecasting accuracy, cost control, and labor alignment, to protect margins and plan more effectively for the future.”
Key Findings
Revenue performance softened
- Budgeted RevPAR for Q1 to Q3 2025 averaged $131.37. Actual performance landed at $119.22, down nearly 9 percent.
- ADR finished 4.9 percent below budget, reflecting increased price sensitivity and slower-than-expected group and corporate recovery.
- Rooms revenue was down 12 percent below budget, with slower summer compression and lengthening booking windows contributing to the gap.
Margins remained stable despite revenue shortfalls
- GOP margin held at 37.7 percent, just 1.2 points below budget, signaling stronger operational discipline.
- Improved mid-year forecasting narrowed the gap between projected and actual results.
- Hotels leveraged labor controls, cost containment, and more frequent forecasting cadences to offset weaker topline performance.
Market and segment variances shaped the story
- Upper-midscale and upscale hotels achieved the highest GOP margins, outperforming luxury and independent segments despite lower ADR.
- Hawaii, California, New York, and Washington, D.C., outperformed the national average for RevPAR.
- Tourism-heavy regions continued to show resilience, while central states lagged.
Planning for 2026
The report also outlined the strategies hoteliers can use to protect profitability in 2026. With inflation still elevated and demand steady but not accelerating, operators will need to move beyond static budgets to more dynamic, data-driven forecasting that can quickly adapt to changing market conditions.
The six priorities that will define profitability in the year ahead include:
- Forecast with precision. Move from static budgets to living forecasts that update frequently and incorporate demand, labor, and expense data for real-time decision-making.
- Price for profit, not just growth. Shift pricing focus from topline RevPAR to contribution margin to ensure every rate decision drives bottom-line impact.
- Align labor to demand. Tie staffing levels directly to occupancy and activity so schedules flex automatically as business levels change.
- Plan costs dynamically. Use lean, base, and stretch cost models that can adjust quickly to booking pace, inflation, or demand shifts.
- Redefine what growth means. Focus on steady, profitable expansion by investing in markets and channels that drive real contribution. Track GOP percentage as a core performance metric.
- Build a culture of forecasting accuracy. Make forecast accuracy and labor efficiency per occupied room the leading success indicators.
