Us Hotel Growth Forecasts Cut For 2025–26 As Costar And Tourism Economics Warn Of Slower Travel Demand

Published on August 8, 2025 |

By: Tuhin Sarkar

US Hotel Growth Forecasts Cut for 2025–26 arsenic CoStar and Tourism Economics Warn of Slower Travel Demand — this is nan reality nan hospitality manufacture is facing correct now. US Hotel Growth Forecasts are nary longer pointing to nan beardown upward inclination galore had hoped for. Instead, forecasts for 2025–26 from CoStar and Tourism Economics person been cut. The logic is clear. These respected analysts now pass that slower recreation request will measurement connected hotels crossed nan country.

CoStar has adjusted its figures to bespeak a weaker outlook. Tourism Economics has done nan same, informing that slower recreation request is becoming a much imperishable characteristic of nan market. This alteration intends edifice owners and operators must hole for tighter margins and much title for guests. The trim to nan US Hotel Growth Forecasts for 2025–26 shows really economical uncertainty, higher costs, and shifting recreation habits tin reshape an full industry.

Slower recreation demand, arsenic CoStar and Tourism Economics explain, will not extremity each growth, but it will make it harder to achieve. Hotels will request to activity smarter to pull travellers, support rates, and protect profits. The forecast trim for 2025–26 is simply a awesome to nan manufacture to accommodate now. Those who return nan warnings from CoStar and Tourism Economics earnestly will beryllium amended placed to navigate slower recreation request and still win successful a changing market.

A Softer Road Ahead for US Hotels

The US edifice assemblage is preparing for a slower gait of maturation successful 2025 and 2026. CoStar and Tourism Economics person revised their forecasts down. They expect demand, Average Daily Rate (ADR), and Revenue Per Available Room (RevPAR) to turn little than first predicted. Profit levels stay stable, but margins are nether strain. These updates were shared astatine nan 17th Annual Hotel Data Conference.

The logic for nan trim is clear. The system is showing signs of slower momentum. Inflation is still high. International visitant numbers are not increasing arsenic accelerated arsenic expected. Business and user spending is besides softer. These factors are affecting really galore group travel, really agelong they stay, and really overmuch they walk connected hotels.

What nan Numbers Now Show

The changes to nan forecast are measurable. For 2025, request maturation has been reduced by 0.6 percent points. ADR maturation is down by 0.5 points. RevPAR maturation is little by 1.1 points. For 2026, request is trim by 0.5 points, ADR by 0.3 points, and RevPAR by 0.7 points.

GOPPAR, which is Gross Operating Profit Per Available Room, is unchanged. But margins will shrink. Forecasts now propose a 0.3 percent constituent driblet successful 2025 and a 2.3 constituent driblet successful 2026. Food and beverage costs are nan biggest risk. Labour, energy, and proviso concatenation costs besides stay high.

The US edifice manufacture is heading for slower maturation successful 2025 and 2026. CoStar and Tourism Economics person trim their forecasts, signalling weaker request ahead. The announcement was made astatine nan 17th Annual Hotel Data Conference. Key measures for illustration demand, Average Daily Rate (ADR), and Revenue Per Available Room (RevPAR) are each group to drop. Demand is expected to autumn by 0.6 percent points successful 2025 and 0.5 successful 2026.

The downgrade reflects nan effect of persistent ostentation and changing recreation behaviour. It besides shows that world waste and acquisition and governmental uncertainty are shaping recreation patterns. While nan driblet is modest, it comes astatine a clip erstwhile hotels are already adjusting to slower world arrivals and tighter user spending.

Why nan Forecast Has Been Cut

Amanda Hite, president of STR, explained that ostentation remains a cardinal factor. Travellers are much cautious pinch spending. Tough almanac comparisons pinch erstwhile highest years besides make maturation harder to achieve. Travel patterns are shifting, pinch shorter booking windows and less extended stays.

These trends are hitting edifice capacity crossed some leisure and business recreation segments. The slowdown is not only astir less guests but besides astir really overmuch they are consenting to walk per stay. Even pinch these headwinds, manufacture leaders judge betterment is still imaginable successful nan mean term.

Inflation and Travel Patterns Shape 2025 Outlook

Persistent ostentation continues to eat into some user and firm recreation budgets. Higher prices for flights, food, and experiences person forced galore travellers to shorten trips aliases downgrade edifice choices. This displacement reduces ADR maturation imaginable and impacts gross targets.

Hotels are seeing a alteration successful request sources. While home leisure recreation remains resilient, business recreation and group bookings person yet to return to pre-pandemic levels. These patterns person made forecasting much analyzable and forced operators to rethink pricing strategies.

Tariffs and Trade Talks Add to Industry Uncertainty

Aran Ryan from Tourism Economics noted that while nan US system is slowing, it should debar recession. The bigger interest is nan resistance from tariffs and ongoing waste and acquisition negotiations. Tariffs tin impact recreation indirectly by expanding costs for imported equipment and reducing wide user confidence.

The conclusion of waste and acquisition talks could assistance sentiment and thief stabilise edifice performance. For now, uncertainty complete argumentation guidance continues to limit finance and description plans for galore edifice operators. This situation makes it harder for nan manufacture to perpetrate to large-scale developments.

RevPAR and ADR Growth Lose Momentum

The revised forecast points to slower maturation successful cardinal capacity indicators. RevPAR, a important measurement of edifice health, is expected to turn much slow than antecedently projected. ADR will besides look unit arsenic operators activity to support rooms filled amid softer demand.

For galore hotels, nan attraction successful 2025 will beryllium connected maintaining occupancy while protecting profitability. This could mean much targeted promotions, move pricing strategies, and a sharper attraction connected value-added services to pull guests. The competitory scenery will go much aggravated arsenic operators conflict for marketplace share.

ADR and RevPAR Lose Pace

ADR is still expected to emergence successful 2025 and 2026. But nan gait of summation will beryllium slower. This intends hotels whitethorn not beryllium capable to raise rates arsenic overmuch arsenic they did successful nan past 2 years. RevPAR, which combines occupancy and ADR, will besides turn much slowly.

Hotels will request to beryllium much imaginative successful pricing. Offering value-added packages, loyalty rewards, aliases elastic booking position whitethorn thief support occupancy up while protecting ADR. Revenue managers will person to attraction connected balancing value and measurement to debar losing marketplace share.

Margins Under Pressure

Even pinch unchangeable GOPPAR, edifice margins are forecast to shrink. The main logic is rising costs. Food and beverage departments are nether peculiar strain. Ingredients costs more. Labour costs are climbing. Energy prices stay high.

Hotels will request to find ways to run much efficiently. This could mean adjusting menus, reducing waste, and utilizing exertion to negociate staffing. Savings successful these areas tin thief offset higher costs without hurting nan impermanent experience.

The Impact of Tariffs and Trade

Trade disputes and tariffs are an added furniture of uncertainty. They tin raise costs for imported equipment utilized successful hotels, from nutrient to furniture. They tin besides trim user confidence, making group little apt to travel.

The conclusion of waste and acquisition talks could bring a assistance successful sentiment. For now, operators stay cautious astir investing successful caller projects until nan argumentation situation becomes clearer.

The Role of International Travel

International visitors are cardinal to galore US markets. Cities for illustration New York, Miami, Los Angeles, and San Francisco dangle connected overseas travellers for a ample stock of their edifice business. Visa delays, higher airfares, and governmental issues person slowed nan return of these guests.

Marketing efforts overseas could help. Tourism boards and edifice brands are already targeting campaigns to bring much visitors from Europe, Asia, and South America. If successful, this could easiness immoderate of nan unit connected municipality edifice performance.

Preparing for a Slower Market

Hotels tin still win successful a slower maturation market. The attraction should beryllium connected attracting home travellers, enhancing loyalty programmes, and building beardown relationships pinch firm clients. Flexible pricing tin thief support occupancy stable.

Working pinch arena organisers, airlines, and attractions tin besides create caller demand. Bundled deals and cross-promotions tin springiness guests much reasons to book.

GOPPAR Stable but Margins Under Pressure

While nan Gross Operating Profit Per Available Room (GOPPAR) forecast remains unchanged, profit margins are expected to tighten. Rising expenses, particularly successful nutrient and beverage operations, are nan main concern. Labour costs, power prices, and proviso concatenation pressures are besides contributing factors.

Hotels whitethorn request to set work models to negociate these costs without damaging impermanent satisfaction. This could see paper adjustments, power ratio upgrades, and selective staffing changes. Operators will person to equilibrium costs power pinch maintaining nan value of impermanent experiences.

Policy Shifts Could Lift 2026 Recovery

Both CoStar and Tourism Economics expect conditions to amended successful 2026. Tax cuts and reduced argumentation uncertainty could boost user spending and firm recreation budgets. This would thief request retrieve and support amended capacity for ADR and RevPAR.

A stabilising world system and improved waste and acquisition relations could besides promote much world recreation to nan US. For now, edifice operators will request to navigate a challenging twelvemonth while positioning themselves for a imaginable rebound.

The Role of International Visitors successful Growth

Declining world visitant numbers person been a notable facet successful nan 2025 downgrade. Visa delays, higher recreation costs, and geopolitical issues person slowed inbound tourism. This impacts awesome US cities much heavily, wherever overseas travellers dress up a important information of edifice demand.

If inbound recreation improves successful precocious 2025 and into 2026, it could springiness nan edifice assemblage a much-needed lift. Tourism boards and edifice brands are expected to summation overseas trading efforts to seizure this opportunity.

Strategies Hotels Can Use to Offset Slowdown

Hotels tin still find maturation opportunities contempt nan weaker forecast. Focusing connected home markets, leveraging loyalty programmes, and investing successful targeted integer trading tin thief support occupancy. Flexible pricing and tailored packages tin besides tie successful travellers seeking value.

Partnerships pinch airlines, attractions, and arena organisers could make caller request streams. Hotels that accommodate quickly to changing recreation patterns will beryllium amended placed to outperform successful a slower market.

Industry Remains Cautiously Optimistic

Despite nan downgrade, manufacture leaders are not predicting a downturn arsenic terrible arsenic past crises. The fundamentals of US tourism stay strong. There is still dependable request for leisure travel, and business recreation is slow recovering.

The cardinal for 2025 will beryllium resilience and adaptability. Hotels that negociate costs, support work quality, and enactment aligned pinch evolving impermanent needs tin still execute patient capacity moreover successful a softer maturation environment.

Long-Term Growth Still Possible

While 2025 will beryllium a twelvemonth of slower growth, nan semipermanent outlook for nan US edifice assemblage remains positive. Economic cycles are natural, and betterment periods often lead to invention and stronger business models.

Investments successful technology, sustainability, and impermanent acquisition will beryllium captious successful shaping nan industry’s future. Those who hole now will beryllium champion positioned to seizure marketplace stock erstwhile request accelerates again.