Dive Brief:
- U.S. hotel RevPAR declined 1% year over year in August, the result of occupancy dropping 1.3% and ADR increasing 0.3% for the same period, according to CoStar data published Friday.
- The August results come after U.S. RevPAR also decreased in July, by 1.1% year over year, according to CoStar. Meanwhile, hotel companies reported widespread U.S. RevPAR declines in the second quarter of this year.
- As the close of the third quarter approaches, the July and August RevPAR declines could signal how hotel companies will perform in Q3. U.S. RevPAR declines continued into the first two weeks of September, CoStar data shows.
Dive Insight:
On the heels of RevPAR declines in July and August, U.S. hotels saw RevPAR decrease 0.7% year over year in the first week of this month (ended Sept. 6) and 1.7% the following week (ended Sept. 13), CoStar reported.
The declines reflect the RevPAR troubles some top hotel companies reported in Q2.
Companies including Hilton, Wyndham Hotels & Resorts and Choice Hotels International posted U.S. RevPAR declines during their Q2 earnings. Their reporting came after CoStar had previously published that U.S. RevPAR dropped 0.1% year over year in April, grew 0.1% year over year in May and decreased 1.2% year over year in June.
The RevPAR declines in July and August, according to CoStar, came amid “continued underperformance and elevated macroeconomic concerns.” These factors led CoStar and Tourism Economics to further downgrade their U.S. hotel growth guidance for 2025 and 2026 last month, having previously downgraded their growth projections in early June.
CoStar and Tourism Economics forecast that RevPAR will drop 0.1% year over year in 2025, with ADR growing 0.8% year over year and occupancy dipping slightly from 63% in 2024 to 62.5% this year.
In both July and August, New York City experienced the highest occupancy level among the top 25 U.S. markets, according to CoStar.
