While U.S. hotel performance remained positive for a 20th consecutive week, with revenue per available room (RevPAR) increasing 4.4% year over year and the industry has now sustained growth for nearly five months, the pace of expansion continues to cool. The week ending in August 22 marked the fourth consecutive week of slowing RevPAR growth and the lowest weekly increase since early May.
The moderation was driven by lower average daily rate (ADR) growth. After peaking at 9.4% in the middle of summer, ADR growth slowed to 2.3% last week, marking the first time since early May that pricing growth fell below the rate of inflation. Demand remained comparatively stable, with room nights sold increasing 2.4% year over year and occupancy rising 1.3 percentage points. Although demand outpaced ADR growth for the first time in 18 weeks, the crossover was largely driven by weaker rate growth rather than stronger demand. Specifically, ADR growth slowed 1.3 percentage points week over week as compared to demand’s 0.6 percentage point slowdown.
Luxury and upper-upscale hotels lose some of their pricing power
Much of the slowdown can be traced to the industry's highest-priced segments. Luxury and upper-upscale hotels posted a 5% increase in RevPAR last week, well below their summer average growth rate of 10.8%. The lower RevPAR gains were driven by weaker ADR growth. Rates increased by just 3.5%, compared with an average weekly gain of 8.2% throughout the summer period. As a result, the segments' influence on overall U.S. performance declined substantially. Luxury and upper-upscale properties contributed an average of 215 basis points to total U.S. RevPAR growth throughout the summer but only 45 basis points last week.
New York and Las Vegas weigh on major-market performance
The softer industry performance was reflected in the nation's largest markets. Collectively, top 25 markets recorded RevPAR growth of just 2.7%, supported by an ADR increase of 2.4%. Both metrics were considerably lower than the roughly 10% RevPAR growth and 8.5% ADR growth these markets averaged during the summer.
New York recorded a 10.6% decrease in RevPAR, driven largely by a 6.8% ADR decline as the market lapped a stronger event calendar that included U.S. Open Fan Week in 2025. Meanwhile, Las Vegas saw RevPAR fall 20% as demand declined 17.9%. Together, these markets created a meaningful drag on major-market performance. Excluding New York City and Las Vegas, Top 25 markets would have posted a combined RevPAR increase of 7.2%.
Because New York and Las Vegas are the nation's two largest luxury and upper-upscale hotel markets, their performance also helps explain much of the segment-level slowdown seen last week. The outsized declines in these markets reduced the contribution that upper-tier hotels made to overall U.S. RevPAR growth, continuing the broader trend of moderating ADR gains that has emerged in recent weeks.
Even though New York and Las Vegas had an off week, strong pockets of hotel RevPAR growth remained. San Francisco, up 26%; St. Louis, up 23.1%; and Chicago, up 18%, recorded the largest RevPAR increases among top 25 markets last week. Chicago's performance was particularly notable because it continued a trend that has persisted throughout the summer, with the market averaging approximately 17% RevPAR growth over the period. These gains highlight how a handful of large-market declines, rather than widespread weakness, were responsible for holding back overall top 25 performance.
Markets outside the top 25 continue to provide stability
Outside the nation's largest markets, performance trends remained more consistent. Markets beyond the top 25 posted a combined RevPAR growth of 5.5%, outperforming larger markets despite experiencing the same moderation in ADR growth.
These markets were supported by stronger demand growth, with room demand increasing 3.3% year over year. Markets outside the top 25 accounted for 88% of all U.S. demand growth last week, underscoring their growing importance to the industry's overall performance.
Growth also remained broad-based. Three-quarters of markets outside the top 25 recorded RevPAR increases, indicating that positive performance was not limited to only a handful of destinations. However, the strongest-performing markets continued to share familiar themes. Large events, conventions, and expanding data center development remained common demand drivers among many of the week's top-performing markets.
While U.S. hotel performance remains firmly positive, the factors supporting growth have evolved from those that characterized much of the summer. ADR growth, particularly among luxury and upper upscale hotels, slowed substantially from its mid-summer peak, reducing the contribution those properties have made to overall industry performance. Demand growth remains stable and broadly distributed across the country, but last week's results suggest the moderation in national RevPAR growth is being driven primarily by easing ADR momentum rather than weakening demand.
RevPAR outside the US rebounds
After slipping in the previous week, global RevPAR on a comparable and constant USD basis, returned to the growth rate seen in late July and early August, rising 2.7% on ADR with occupancy also up. The occupancy increase was the first since early June and driven by growth in China, the rest of Asia and across several European countries including France and Spain.
Like the rest of the world, China saw its first occupancy gain since June as the measure rose 1.5 percentage points with occupancy achieving 77.1%, the highest level of the year. RevPAR increased 2.6% with ADR growing just0.6%. Nearly all the large markets saw occupancy grow, led by Beijing, Guangdong, and Guangzhou. One notable exception was Shanghai, where occupancy retreated 3.7 percentage points. More than half of all markets saw occupancy grow in the week, the most of the past 13 weeks.
Mexico continued to see RevPAR decrease, falling 13.7% this week and marking three consecutive weeks of double-digit declines in ADR. And while the Gulf Cooperation Council countries also continued to see double-digit RevPAR declines, occupancy was a respectable 60% this past week, down slightly from 61.3% in the previous week. This was only the third time that occupancy topped 60% since the start of the U.S. war with Iran.
Cole Martin is Analytics and Insights Specialist at STR and Isaac Collazo is senior director of analytics at STR.