U.S., August 19, 2025
News Summary
The U.S. hotel industry is facing challenges as revenue per available room (RevPAR) declined by 1.6%. Major cities, especially Houston and Las Vegas, report significant drops in occupancy rates and average daily rates. Nearly half of U.S. hotel markets experienced a decrease in RevPAR, while luxury hotels are the only segment showing growth. Inflation and rising operational costs are concerning issues that threaten the industry’s profit margins moving forward.
U.S. Hotel Industry Performance Declines – In a concerning trend for the hospitality sector, the revenue per available room (RevPAR) in the U.S. saw a 1.6% decline during the week of August 3-9. This decrease was attributed to falling occupancy rates and lower average daily rates.
Occupancy rates fell by 0.7 percentage points, while the average daily rate (ADR) decreased by 0.6%. The decline in performance was particularly pronounced in major cities like Houston and Las Vegas, which together account for approximately 14% of hotel rooms in the top 25 U.S. markets.
Nearly 48% of all U.S. hotel markets experienced a decrease in RevPAR, with 42% of markets witnessing declines for three or more weeks in the past six weeks. Excluding data from Houston and Las Vegas, the RevPAR decline in the top 25 markets was even steeper at -2.5%. While some Southeast markets have seen a return of demand post-Hurricane Debby, others continue to struggle.
Key City Performance
Houston’s ongoing challenges stem partly from difficult comparisons with last year’s performance affected by storms. During this reporting week, Houston endured the most significant drop in RevPAR at 36.4%, followed by New Orleans at -20.3% and Las Vegas at -18.9%.
Conversely, cities like San Francisco, which reported the highest RevPAR growth among the top 25 markets at 22.2%, attributed this surge to events such as the World Transplant Congress. Other cities showing strong performance included Tampa Bay (10.2%), Miami (8.9%), Dallas (9.4%), and Detroit (8.4%).
Market Trends
Luxury hotels emerged as the only chain scale consistently showing gains, with a 2.4% increase in RevPAR this week. However, a clear bifurcation within the industry is becoming evident, with lower chain scales struggling. Economy hotels reported a decline of 5.7%. Midscale and upper-midscale hotels experienced slight improvements, while upscale and upper-upscale hotels remained relatively stable.
The luxury and upper-upscale hotel segments have recorded a decline in group demand, which fell 6.2% for the week. Group demand in the 25 top markets took a more significant hit at 9.6%. Despite these declines, average daily rates remained robust, showing growth of 3.4% for top markets and 2.1% for non-top markets.
Future Concerns
Inflation and rising operational costs are pressuring profit margins as these expenses increase at a pace faster than room revenues. The ongoing performance issues, particularly as summer comes to a close, raise concerns about the hotel industry’s future, especially in leasing and conference sectors which have seen lackluster group demand.
The effects of last year’s Hurricane Debby, which impacted hotel demand in various Southeastern markets, also factor into this year’s performance comparisons. Areas that previously suffered have seen a recovery with double-digit RevPAR growth in some locales. Nationwide, RevPAR is down only 1.1% when excluding Hurricane Debby markets, and drops to -0.2% when isolating Houston and Las Vegas.
While globally, RevPAR has shown relatively healthy gains, particularly in regions such as Japan, Canada, and Spain, the impact of events like the Paris Summer Olympics last year resulted in a 3.7% decline in France’s hotel market.
Conclusion
The current state of the U.S. hotel industry indicates considerable challenges ahead, driven by factors that include economic pressures and historical performance comparisons. Continued analysis and strategic adjustments will be essential as the industry seeks to navigate through these turbulent times.
FAQ
- What is the current state of U.S. hotel performance?
- The U.S. hotel industry saw a 1.6% decline in RevPAR during the week of August 3-9, with occupancy rates and average daily rates also falling.
- Which cities are most affected by the decline?
- Houston and Las Vegas faced significant declines, with Houston experiencing a 36.4% drop in RevPAR.
- How are luxury hotels performing compared to other segments?
- Luxury hotels are the only segment showing consistent gains in RevPAR, up 2.4%, while economy hotels reported a decline of 5.7%.
- What are the potential future concerns for the hotel industry?
- Inflation, rising operational costs, and reduced group demand may continue to pressure the industry’s profit margins as summer ends.
Key Statistics
- RevPAR decline: 1.6%
- Occupancy rate drop: 0.7 percentage points
- Average daily rate (ADR): -0.6%
- RevPAR decline in Houston: 36.4%
- RevPAR growth in San Francisco: 22.2%
- 48% of U.S. hotel markets saw RevPAR declines
Deeper Dive: News & Info About This Topic
HERE Resources
Houston Hotels Transform with Avion and Marriott Strategies
1754 Properties Acquires Marriott Hotel in Winston-Salem
High-Tech Hotels to Transform Mansfield’s Staybolt Street District
Arlington Prepares for the Japan-Texas Economic Summit
North Texas SC Wins MLS NEXT Pro Invitational Title
Min Woo Lee Wins Texas Children’s Houston Open in Golf Triumph
Houston Becomes a Hotspot for Hotel Investments
Houston Hotel Honored as Top Resort in Texas
Houston Celebrates 4th of July with Over 30 Events
Beyoncé Launches ‘Cowboy Carter’ Tour in Houston
Additional Resources
- CBRE: U.S. Hotels State of the Union
- Hotel Dive: Hotel Short-Term Rental Performance Q2
- Hotel News Resource
- Wikipedia: Hotel
- CoStar: Forecasters Expect U.S. Hotel Performance to Worsen
- Google Search: US Hotel Industry Performance
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.
