CBRE softens 2025 U.S. hotel forecast on slower economic growth

Modest gains expected in RevPAR, occupancy, and ADR - with urban hotels and drive-to resorts best positioned for growth

CBRE Hotels Research has adjusted its 2025 forecast for the U.S. hotel industry, citing a weaker-than-expected macroeconomic outlook. The firm now anticipates softer gains in occupancy, average daily rate (ADR), and revenue per available room (RevPAR) compared to its February projections, though it still expects growth supported by increased group and business travel, a weaker dollar, and rising inbound international tourism.

Key takeaways

• Economic forecast adjustment: U.S. GDP growth for 2025 revised down to 1.4% (from 2.4%); inflation forecast raised to 2.9% (from 2.5%).
• RevPAR outlook: Now expected to grow 1.3% YoY (previously 2%).
• ADR forecast: Revised to 1.2% growth (down from 1.6%).
• Occupancy increase: Expected to rise 0.21 percentage points, a slight downgrade from the previous 0.23.
• Drivers of growth: Boost from group/business travel, lower airfares, and a weaker U.S. dollar encouraging domestic and inbound international travel.
• Best-positioned segments: Urban hotels, regional resorts, and drive-to destinations stand to benefit most.
• Supply growth outlook: Projected at 0.8% annually over the next four years, half the long-term average - potentially strengthening pricing power for hoteliers.

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