Dive Brief:
- In 2025, annual U.S. hotel occupancy and RevPAR fell year over year for the first time since 2020, according to recently released data from CoStar.
- Occupancy fell 1.2% year over year to 62.3%, while RevPAR fell 0.3% to $100.02. ADR rose 0.9% to $160.54, per the report, which tracked 25 top markets.
- New York City saw the highest absolute levels in each of the key performance metrics, while Las Vegas posted the largest year-over-year declines in ADR and RevPAR.
Dive Insight:
In their final hotel forecast revision of 2025 in November, CoStar and Tourism Economics downgraded their full-year outlook, and projected a RevPAR drop of 0.4%, which the companies attributed to rising costs and policy uncertainty. The companies also downgraded their hotel growth outlook for 2026 across all three performance metrics.
Some of those projections are beginning to play out, per CoStar’s new report.
Las Vegas ADR fell 4.3% year over year in 2025 to $199.79, with RevPAR down 10.9% to $149.13, as the city weathered a tourism slump caused in part by changing traveler behavior. Visitor volume was down 12% and 6.7% year over year in July and August, respectively, according to the Las Vegas Convention and Visitors Authority; the Spirit Airlines bankruptcy also led to several canceled routes to the region.
Meanwhile, Houston’s occupancy dropped 8.6% year over year in 2025 to 58.9%, representing the steepest decline for that metric for any of the 25 markets covered. The city posted the second-largest combined number of renovations and conversions in Q3, and in October, union workers at Hilton Americas-Houston ratified a new contract following a 40-day strike.
However, there were also gains, particularly in New York City, which saw ADR increase 4.7% year over year in 2025 to $333.71, with RevPAR up 4.5% to $280.71. Even though occupancy in the city fell 0.2% to 84.1%, the figure still bested other U.S. markets.
In San Francisco, ADR rose 6% year over year to $225.82 and RevPAR was up 11.8% to $155.84, representing the highest yearly percentage increases in each metric. An April report from JLL found that San Francisco’s hotel market was poised for significant growth, despite being one of the slowest markets to recover following the COVID-19 pandemic.
The largest percentage gain in occupancy in 2025 came from St. Louis, which posted a 6.5% year over year increase to 61.7%, per CoStar. Kevin Davis, Americas CEO for JLL’s Hotels & Hospitality Group, told Hotel Dive late last year that St. Louis would be one of the more desirable urban markets for investors for the coming year.
