ARLINGTON, Va.—CoStar and Tourism Economics have issued a further downgrade to U.S. hotel performance projections in their final 2025 forecast update, citing persistent economic pressures. CoStar Group is a commercial real estate information and analytics company, and STR—one of its brands—is a global provider of hospitality data and benchmarking.
For 2025, occupancy expectations were reduced by 0.2 percentage points to 62.3%. Average daily rate (ADR) growth remains projected at 0.8%, while revenue per available room (RevPAR) was lowered by 0.3 percentage points to a decline of 0.4%. The country’s last full-year RevPAR declines occurred in 2020 and 2009.
Forecast adjustments for 2026 follow a similar pattern, with reductions of 0.3 percentage points for occupancy, 0.1% for ADR, and 0.3% for RevPAR.
“We expect little change in the macroeconomic environment as unemployment and prices continue to rise,” said Amanda Hite, STR president. “As a result, our hotel performance outlook for the remainder of this year and next were lowered once again. ADR is growing well below the rate of inflation, which in turn will put more pressure on margins.”
In the November forecast, Tourism Economics pointed to ongoing challenges. “Job market softening, policy uncertainty, and tariff costs remain near-term drags for consumers,” said Aran Ryan, director of industry studies. “However, heading into 2026, we expect the U.S. travel economy to firm up moderately. Household income growth will continue, accompanied by tax cut benefits, resumed hiring, and less policy instability. Expanding global long-haul travel and World Cup interest will bring improved international visitation.”
CoStar and STR also issued an updated profit-and-loss outlook. “GOPPAR projections have been lowered from our previous forecast, with the decrease in 2025 being mainly due to higher expenses, especially in the F&B department, as well as increased costs in other operated departments, marketing, and utilities,” Hite said. “Labor costs will be slightly higher in 2025, likely due to the increase in the aforementioned F&B department, which is traditionally more labor-intensive.”
