A new US hotel sector forecast published by CBRE (NYSE: CBRE) is predicting revenue per available room (RevPAR) will grow modestly in 2025, with activity fueled by urban locations benefitting from increased group and business travel along with rising demand for drive-to and regional leisure destinations.
CBRE forecasts a 1.3% increase in RevPAR for 2025, with occupancy and average daily rate (ADR) rising by 14 basis points (bps) and 1.2% year-over-year, respectively. This represents slightly softer growth than had been anticipated in CBRE’s February forecast, which projected 2.0% RevPAR growth, based on a 21-bp boost in occupancy rates and a 1.6% increase in ADR.
CBRE noted that its forecast is based on an expected 1.4% increase in GDP growth this year (down from 2.4% annual growth as of the February forecast) and a 2.9% average inflation rate for 2025 (40 bps higher than anticipated in February).
Looking ahead, CBRE projects RevPAR growth in the range of 1.0% to 3.0% over the next few years as several major events – including the 2026 FIFA World Cup, the 250th anniversary of the nation’s founding in 2026, the 2028 Los Angeles Summer Olympics, and the opening of a theme park in Orlando and other new attractions.
Rachael Rothman, CBRE’s head of hotel research and data analytics, observed, “Economic and geopolitical uncertainties aside, several factors will drive RevPAR growth in 2025. These include an uptick in group and business travel, along with a weaker U.S. dollar and lower airfares, which may encourage domestic travelers to stay closer to home while boosting inbound international visitation to the US. These trends are expected to particularly benefit urban hotels, regional resorts and drive-to destinations.”
