U.S. Hotel Sector Forecasts 2% RevPAR Growth in 2025
The U.S. hotel industry is projected to see approximately 2% growth in revenue per available room (RevPAR) in 2025, according to a recent report by CBRE. This moderate uptick is expected to be primarily driven by room rate increases, as other growth catalysts—such as international travel, airline passenger numbers, real GDP growth, and discretionary income—are showing signs of slowing. Additionally, competition from alternative lodging options continues to pose challenges for the traditional hotel sector.
CBRE anticipates the strongest RevPAR growth will occur in urban markets, where a 2.8% increase is expected. In contrast, suburban and small-town markets are forecasted to see more modest growth of 1.3% and 1.8%, respectively. Higher-end hotels are likely to outperform the broader market, benefiting from mid-single-digit increases in inbound international tourism, rising group travel demand, and slight improvements in business travel activity.
While the U.S. experienced an 11.5% drop in hotel investment volume in 2024, CBRE’s 2025 Global Hotel Outlook highlighted a 16% increase in global demand for hotel assets. Notably, cross-border capital investment surged by 55%, suggesting that international investors continue to view the hotel sector as a promising long-term asset class.
