U.S. Hotel Industry Sees First Annual Decline in Occupancy and RevPAR Since 2020
- Nationwide hotel occupancy and revenue per available room (RevPAR) both dropped in 2025, marking the first yearly decline since the pandemic.
- Major cities like New York and San Francisco outperformed the national average, while markets such as Houston and Las Vegas saw notable decreases.
The U.S. hotel industry experienced a setback in 2025, with annual occupancy and revenue per available room (RevPAR) both declining for the first time since 2020, according to new data from CoStar.
Nationally, hotel occupancy dropped to 62.3%, a 1.2% decrease from 2024. RevPAR, a key profitability metric, slipped by 0.3% to $100.02. Despite these declines, the average daily rate (ADR) edged up by 0.9% to $160.54, suggesting that hotels raised prices even as fewer rooms were filled.
Performance varied significantly across major U.S. markets. New York City led the nation in occupancy (84.1%), ADR ($333.71), and RevPAR ($280.71). While New York’s occupancy dipped slightly by 0.2%, its ADR and RevPAR rose 4.7% and 4.5%, respectively, highlighting the city’s ongoing appeal to travelers.
San Francisco stood out for the largest increases in ADR (up 6.0% to $225.82) and RevPAR (up 11.8% to $155.84), indicating strong demand and pricing power. St. Louis posted the biggest jump in occupancy, rising 6.5% to 61.7%.
Conversely, Houston experienced the steepest drop in occupancy, falling 8.6% to 58.9%. Las Vegas saw the most significant declines in both ADR (down 4.3% to $199.79) and RevPAR (down 10.9% to $149.13), reflecting a more challenging environment for hotels in the entertainment capital.
These mixed results underscore the uneven recovery and ongoing challenges facing the hotel and travel industry as it adapts to shifting travel patterns and economic conditions in 2025.
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