U.S. hoteliers brace for tighter margins as subdued ADR growth and ongoing softening point to tougher conditions through 2026
Nov 13, 2025
U.S. hotel performance projections for 2025 and 2026 have been lowered for the third time this year, as STR and Tourism Economics cite a static macroeconomic environment, rising unemployment, and weaker pricing power. Occupancy, ADR growth, and RevPAR expectations all move slightly downward, pointing to tougher conditions ahead.
Key takeaways
- Further downgrade for 2025: STR and Tourism Economics now expect 2025 occupancy to fall to 62.3%, down from 63.1% in 2024 and below their August projection.
- RevPAR expected to slip: Full-year 2025 RevPAR is now forecast to decline 0.4% year over year—steeper than the previously projected 0.1% drop.
- ADR growth remains subdued: Average daily rate is expected to rise just 0.8% in 2025, well below inflation and offering little relief to hotel margins.
- Softening persists into 2026: The firms expect 2026 occupancy to fall further to 62%, with slightly weaker ADR and RevPAR growth than previously forecast.
- Economic headwinds continue: Rising unemployment, higher prices, policy uncertainty, and tariff pressures are limiting consumer travel spending in the near term.
- Some optimism toward 2026: Tourism Economics notes potential tailwinds from household income growth, resumed hiring, tax cuts, and stronger international demand—including World Cup-related travel.
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