Business travel demand at U.S. hotels should increase year-over-year in 2025, but overall demand growth will be “muted” due to softening leisure travel
Nov 22, 2024
The U.S. lodging industry is projected to experience modest growth through 2025, driven primarily by a moderate increase in average daily room rates and stable occupancy levels. This is expected to result in a 1.5% annual increase in revenue per available room (RevPAR).
Key takeaways
- Muted demand growth: Demand is expected to remain subdued in 2025, impacted by slowing consumer spending and GDP growth. GDP is projected to grow at an average annual rate of 2.7% in 2024 and 2.1% in 2025;
- Mixed travel trends: While business travel-especially meetings and group events-continues to grow and inbound international travel may return to pre-CVD levels, economic challenges are likely to dampen leisure travel demand;
- Uncertain outlook: The lodging industry’s trajectory could shift as political and economic uncertainties, including the impact of the recent election, become clearer. Factors such as immigration policies, evolving travel patterns and restrictions, and tariff changes will also play a role in shaping the industry’s future.
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