U.S. hotels posted a modest advance in the week of May 11-17 with a strong ending offsetting lackluster performance at the beginning.
Revenue per available room rose 0.9%, lifted by a 1.3% gain in average daily rate as occupancy fell. RevPAR on Thursday through Saturday increased 2.4% with Friday on top, up 3.3%. Tuesday and Wednesday RevPAR was flat at 0.4% growth, and the start of the week was down 1.7%.
This is notable because last week, it was the weekend that saw the largest loss. It is difficult to pinpoint the cause of this weekend flip, but it's possible that a shift in high school and college graduations occurred due to the later start of the semester after the Christmas/New Year holidays.
Detroit earned top honors during a slow week across the top 25 markets
Markets outside the top 25 drove total U.S. hotel performance with a 2.2% RevPAR gain, while RevPAR in the top 25 markets dropped 0.4%. However, 11 of the top 25 saw RevPAR advance, led by Detroit at 26.1%, which hosted Automate 2025.
Chicago hotel RevPAR increased 13.5%, with double-digit gains Tuesday through Saturday. All seven submarkets saw RevPAR growth in the week, ranging from up 1.4% in Chicago Southwest to up 27.6% in Chicago North. The Chicago central business district submarket was up 14.4% for the week and is up 5.9% since Jan. 5, 2025, all on ADR.
Los Angeles and San Diego rounded out the list of double-digit RevPAR gainers. On the flip side, two of the country’s five largest hotel markets, Las Vegas and Atlanta, each saw double-digit RevPAR declines. Atlanta’s slowdown was driven by a decrease in group demand.
A range of leisure-focused events lifted performance across cities outside the top 25
Across the next 70 largest markets, markets with the largest RevPAR gains were Daytona Beach, Florida, which hosted the annual music festival Welcome To Rockville 2025; Charlotte, North Carolina, with the 2025 PGA Golf Championship; and Tucson, Arizona, the site of nature photography conference NANPA 2025.
College graduations make the grade across smaller hotel markets
RevPAR across several smaller markets were affected by college graduations from some of the nation’s largest universities. The top three RevPAR markets included Blacksburg (Virginia Tech), Binghamton (Rochester Institute of Technology) and Champaign-Urbana (University of Illinois). All three saw RevPAR increase by more than 100%.
Group demand slipped
Group demand in luxury and upper-upscale hotels declined 3.2%, with Thursday through Saturday seeing the largest decline, likely due to high school and college graduations. Group ADR increased 2.3%, matching transient ADR up 2.4% while transient demand increased 1.4%.
Across the top 25, five markets posted healthy group demand, led by Detroit, Oahu, Las Vegas, San Diego and Anaheim (Orange County). Over the past four weeks, group demand is down in Atlanta, Las Vegas and New Orleans by more than 10%. Atlanta shows the largest group demand decline — down 15.6% over the last four weeks — but is flat as of May year to date.
Looking ahead
Memorial Day is the unofficial start of summer. Meetings and events along with transient business travel will slow as is typical during this time of year.
There are mixed indicators ahead. Forward bookings are softer for the coming months, with bookings growth in May, flat in June and then declines for July and August. Shorter booking windows may be creating lower levels for July and August, but we are watching closely.
Transportation Security Administration airport screenings were down this past week, but early indications for next week show improvement. AAA predicts 45.1 million Americans are expected to travel domestically for Memorial Day, setting a new weekend record. Thus, only time will tell how people actually react to the increased uncertainty that has permeated this year.
Global RevPAR slowed on falling demand
Excluding the U.S., global hotel RevPAR rose 3.2% during the week of May 11-17. Occupancy retreated 1.2 percentage points after two weeks of growth while ADR continued to grow, up 4.7%. Global RevPAR has increased 65 of the past 72 weeks and in 18 of the 20 weeks of this year.
Once again, Japan led among the 12 key countries with RevPAR up 44%, driven by a 44% ADR increase. The country’s occupancy also increased slightly and stood at 79.5%.
Other countries seeing RevPAR gains included Mexico, France, Spain and Canada. RevPAR was up by more than 5% in those countries, except in Canada where it increased by 2.6%.
China, Germany and India saw RevPAR retreat by more than 10%. China’s decrease was the largest since the week ending April 12 thanks to falling ADR of 7.1%. Of the 10 largest markets in China, eight saw RevPAR decrease with four noting double-digit declines. While occupancy was down 2 percentage points for these 10 markets as a whole, demand was somewhat flat, down 0.4%, with the occupancy decline more due to increasing supply of 2.4%.
Global hotel performance has slowed in recent weeks and many of the blockbuster events — Taylor Swift, Euro 2024, Olympics, etc. — that occurred last year will provide difficult comps this year. That said, the number of Americans traveling internationally continued to increase, although this may slow due to the falling dollar. International travel into the U.S. has slowed, which could prove to be a benefit to hotels around the world.
Isaac Collazo is senior director of analytics at STR. Chris Klauda is director of market insights at STR.
This article represents an interpretation of data collected by CoStar's hospitality analytics firm, STR. Please feel free to contact an editor with any questions or concerns. For more analysis of STR data, visit the data insights blog on STR.com.