U.S. hotels brace for a bumpy Q3 — but bet big on a Q4 rebound

Luxury demand, event calendars, and stronger group bookings fuel cautious optimism despite corporate and government pullbacks

As of mid‑August 2025, hotel industry executives acknowledge a challenging third quarter—driven by economic uncertainty, abbreviated bookings, and subdued corporate and government demand. Yet, much of the industry's rhetoric and data reflects cautious optimism: a rebound is expected in Q4, particularly fueled by attractive event calendars, improved group reservations, and strong global positioning in the luxury and full‑service segments. While near‑term headwinds remain, many see signs that conditions are set for a brighter second half of the year.

Key takeaways

1. Q3 Looks Rocky, but Q4 Is Promising

• Marriott projects Q3 RevPAR (Revenue per Available Room) to be flat to +1%, and expects full‑year growth of +1.5% to +2.5%, with Q4 providing acceleration thanks to holiday shifts and major events.
• Hilton anticipates a similar scenario: Q3 RevPAR flat to slightly down, with full‑year growth flat to +2% and improved trends heading into Q4.
• Hyatt expects full‑year 2025 RevPAR growth of 1% to 3%, with Q3 near flat or down ~3%, and hopes for a stronger Q4. Forward booking trends have improved modestly.

2. Leading with Luxury and Full-Service

• Across major chains, the luxury and full-service segments are outperforming lower-tier chains, particularly in international markets where demand remains healthier.

3. Group Bookings Recovering, Future Positive into 2026

• Marriott reports group revenue pacing for 2026 up ~8%, up from 7% a quarter ago, indicating recovering confidence in group travel.
• Xenia Hotels & Resorts has raised its full-year outlook for adjusted EBITDA and FFO, citing strong group revenue pace for Q4.

4. External Pressures Still Persist

• Industry leaders cite ongoing economic uncertainty, government pullbacks, and corporate hesitancy as constraints on near-term demand.
• Marriott notes that full-year revenue projections have slightly edged down as fewer near-term bookings were made.

5. Event Calendars Provide Tailwinds

• Executives point to upcoming events—including sporting schedules, cultural gatherings, and holiday travel—as key catalysts for Q4 improvements. For example, MGM highlights the Las Vegas ballpark development as a long-term demand driver.
• Seasonality and event timing skew favorably toward Q4, particularly when comparing with tough comps from Q3.

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