Houston, August 26, 2025
News Summary
U.S. hotel revenue per available room (RevPAR) has dropped by 0.5%, highlighting economic pressures and storms affecting markets like Houston. A significant number of markets are seeing declines, with occupancy rates falling amidst a weak summer for the hotel industry. Economy hotels are primarily responsible for this decrease, challenging the overall performance of the hospitality sector as leisure travel is expected to decline further.
U.S. Hotel Revenue Per Available Room Declines Amidst Economic Pressures
In the week ending August 16, 2025, U.S. hotel revenue per available room (RevPAR) decreased by 0.5%, signaling a concerning trend for the hospitality industry amidst persisting economic pressures and challenging year-over-year comparisons, particularly due to recent storms in Houston. Houston’s impact alone contributed 5 basis points to the overall decline in RevPAR. This drop in revenue reflects broader occupancy challenges as nearly 47% of all markets experienced a decline in RevPAR of over half a percentage point, marking the highest number of declining markets in four weeks.
The downward trend in RevPAR was primarily driven by a decrease in occupancy rates, which fell by 0.7 percentage points during weekdays. In contrast, the average daily rate (ADR) showed only a modest increase of 0.4%. Given that weekday RevPAR fell by 0.9% due to this situation, the weekend saw a slight boost, with weekend RevPAR increasing by 0.3% and ADR rising by 0.6%, although occupancy fell by 0.2 percentage points.
Among the top 25 markets, the RevPAR decline was considerably worse, as weekday RevPAR decreased by 2.3% and weekend RevPAR fell by 1.3%, again primarily due to drops in occupancy. Excluding Houston’s impact, the overall weekly RevPAR would have reported a more considerable decline of 0.9%, with weekdays posting a 1.3% drop and weekends remaining flat.
Interestingly, other metropolitan areas outside the top 25 markets reported slight improvements, with weekday RevPAR increasing by 0.2% and weekend RevPAR up by 0.3%, resulting in a collective increase of 0.2% in RevPAR. The most significant uplift was noted in non-metro and rural areas, which experienced a 0.7% weekly increase in RevPAR, buoyed by a notable 1.9% increase in weekend performance, while weekdays saw a modest rise of 0.1%.
This summer has been the weakest for the hotel industry in the last four years, with just two weeks left in the travel season. Demand has dropped significantly, totaling a loss of 1.4 million room nights compared to last year. Overall RevPAR has witnessed a decline of 1.1% as occupancy continued to fall, while ADR edged up by only 0.2%.
Much of the decline can be attributed to economy hotels, which accounted for 45% of overall declines, significantly concentrated in ten primary markets, including Houston and Las Vegas. In fact, these two cities alone represent almost a quarter of the economy hotel decline. Meanwhile, though midscale and upper-upscale hotel classes also faced declines, they contributed only 20% to the total loss in room nights this summer. On a brighter note, segments such as luxury, upscale, and upper-midscale hotels gained approximately 438,000 room nights each this summer; however, these gains were insufficient to counterbalance losses from the lower-performing categories.
Looking ahead, leisure travel is expected to diminish as schools reopen across the nation, and business travel is anticipated to remain inadequate in offsetting this decline. The residual effects of Hurricane Erin and difficulties stemming from previous hurricane comparisons are likely to complicate RevPAR results in the coming weeks.
FAQ Section
What is RevPAR?
RevPAR stands for Revenue Per Available Room, a key metric used in the hospitality industry to assess hotel performance. It is calculated by multiplying a hotel’s average daily room rate by its occupancy rate.
What factors led to the recent decline in RevPAR?
The recent decline in RevPAR was primarily attributed to a drop in occupancy rates, especially during weekdays, coupled with challenging year-on-year storm comparisons affecting markets like Houston.
Which type of hotels faced the most significant declines?
Economy hotels experienced the most significant declines, accounting for 45% of the total decline in RevPAR, while midscale and upper-upscale hotels also reported declines but to a lesser extent.
What are the predictions for hotel revenue trends in the coming weeks?
Leisure travel is expected to slow down due to the return of students to school, and business travel may not be sufficient to offset this decline. Additionally, the impact of recent storms could influence future revenue trends.
Key Features Summary
| Metric | Value |
|---|---|
| Overall RevPAR Decline (week ending August 16, 2025) | -0.5% |
| Houston’s Contribution to Decline | 5 basis points |
| Percentage of Markets with Declines | 47% |
| Overall RevPAR Excluding Houston | -0.9% |
| Economy Hotels’ Contribution to Overall Decline | 45% |
| Luxury Hotel Gains | Approx. 438,000 room nights |
| Expected Trend Due to School Reopening | Declining leisure travel |
Deeper Dive: News & Info About This Topic
HERE Resources
Hermann Park Golf Course Plans Major Renovation
U.S. Hotel Industry Performance Declines Amid Economic Pressures
Houston Hotel Workers Vote Overwhelmingly for Strike Authorization
Houston Hotels Transform with Avion and Marriott Strategies
Former Debate Coach Sues University for Retaliation
1754 Properties Acquires Marriott Hotel in Winston-Salem
Houston Becomes a Hotspot for Hotel Investments
Houston Hotel Faces Potential Labor Dispute Amid Negotiations
MD Anderson Cancer Center Executive Compensation Revealed
Washington, D.C. Shatters Tourism Records
Additional Resources
- CoStar: Hotel Demand and Revenue Trends
- Community Impact: Houston Hotel Revenue Growth
- Hotel Dive: Houston Hotel Workers Picketing
- Houston Chronicle: Hospitality Workers’ Wage Push
- Hotel News Resource: Latest Hospitality News
- Wikipedia: Hotel
- Google Search: Hotel Revenue Trends
- Google Scholar: RevPAR
- Encyclopedia Britannica: Hotel
- Google News: Hotel Industry News
Author: STAFF HERE HOUSTON TX WRITER
HOUSTON STAFF WRITER The HOUSTON STAFF WRITER represents the experienced team at HEREHouston.com, your go-to source for actionable local news and information in Houston, Harris County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Houston Livestock Show and Rodeo, Art Car Parade, and Chevron Houston Marathon. Our coverage extends to key organizations like the Greater Houston Partnership and Houston Area Urban League, plus leading businesses in energy and healthcare that power the local economy such as ExxonMobil, Schlumberger, and Houston Methodist. As part of the broader HERE network, including HEREAustinTX.com, HERECollegeStation.com, HEREDallas.com, and HERESanAntonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
