U.S. hotels record first full-year performance decline since 2020

Occupancy and RevPAR fall in 2025, marking a clear break from the recovery cycle

U.S. hotel performance declined in 2025, marking the first year since 2020 in which both occupancy and revenue per available room fell year over year, according to CoStar data. National occupancy dropped despite modest gains in average daily rate, resulting in a slight decline in RevPAR. Performance varied significantly by market, with some large urban destinations showing resilience while others experienced notable setbacks. The data suggests a transition from post-pandemic rebound to a more normalized and uneven operating environment.

Key takeaways

• First full-year decline since 2020: U.S. hotel occupancy and RevPAR both fell year over year in 2025, ending several years of recovery-driven growth.
• Occupancy weakness drives results: National occupancy declined to 62.3 percent, outweighing a modest increase in ADR and pulling overall RevPAR lower.
• ADR growth remains limited: Average daily rate rose 0.9 percent to $160.54, indicating continued pricing discipline but limited pricing power.
• Major market divergence: New York City led the top 25 markets in occupancy, ADR, and RevPAR, with rate-driven revenue growth despite slightly lower occupancy.
• Selective market outperformance: San Francisco posted the strongest gains in ADR and RevPAR, while St. Louis recorded the largest occupancy increase.
• Pressure in leisure-heavy and energy markets: Las Vegas saw the sharpest declines in ADR and RevPAR, and Houston experienced the steepest drop in occupancy.

Source: CoStar

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