A decade of expansion collides with inflation and competition, leaving only a few segments — like upper-midscale — consistently ahead
Aug 18, 2025
In today’s hotel industry, brand expansion and loyalty growth have been at the forefront of corporate strategies—yet their impact on performance appears increasingly complex. CBRE’s “Hotel Brand Performance 2025” report delves into a decade of data, investigating whether proliferation of brands and loyalty memberships actually translates into better financial returns, particularly through RevPAR (Revenue per Available Room). What emerges is a nuanced picture: while portfolios have grown, inflation and market shifts have dampened real gains, and performance discrepancies between brands are widening.
Key takeaways
Brand & loyalty growth vs. RevPAR performance
- Over the past 10 years, major hotel companies expanded their brand portfolios at 7% CAGR, and loyalty program membership grew at 15% CAGR.
- However, from 2019 onward, the fastest-growing brand family by brand count (15% CAGR) posted only a 0.3% RevPAR CAGR, suggesting that adding brands doesn’t necessarily yield better revenue performance.
Inflation has undermined nominal RevPAR gains
- While nominal RevPAR rose 9.3% since 2019, inflation surpassed that growth—leading to a 10.9% decline in real RevPAR.
- This suggests that increased competition—from both traditional lodging supply and alternative accommodations like short‑term rentals—has eroded pricing power.
Widening performance gapamong brands
- Between 2014 and 2019, 52% of brands outperformed the sample average RevPAR CAGR; since 2019, this has dropped to only 28%, indicating mounting disparity.
- The spread between top- and bottom-performing brands grew from ~5 to nearly 7 percentage points between 2014 to 2024, resulting in a significant 41% cumulative RevPAR premium for the strongest brands (versus 29% previously).
Upper-midscale outperforms as a reliable segment
- The upper‑midscale segment consistently delivers the most predictable returns—both before and after the pandemic. Its success stems from broad brand recognition, flexible guest appeal, operational simplicity, plus popular features like free breakfast and no resort fees.
Struggles for midscale & economy brands
- Midscale and economy chains have experienced RevPAR declines and even closures. While their reductions in room count may eventually help supply-demand balance, their recent RevPAR growth remains the slowest among segments.
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