PHOENIX — The U.S. has reached a point where “it’s really difficult to disentangle the politics from the economics,” and the results aren’t positive for the hotel industry, said Bernard Baumohl, chief global economist for The Economic Outlook Group.
Hotel performance trends across Western U.S. markets look markedly different in 2025 compared to 2024, with some markets rebounding on the strength of events and convention calendars, while others lose steam after strong results a year ago.
Commercial mortgage-backed securities loans for hotels have shown a steady delinquency rate even amid fluctuating industry performance. Revenue per available room has declined for two consecutive quarters as occupancy has declined for seven months and room rates have grown below 2% since February.
In 2024, the average occupancy of branded hotels in Almaty, the largest city in Kazakhstan, and Tashkent, the capital and largest city in neighboring Uzbekistan, set new records as governments efforts to expand the inflow of foreign tourists are starting to pay off.
Hotel performance in U.S. areas near the Canadian border has softened considerably in 2025, as waning Canadian visitation continues to weigh on demand.
Following a sluggish second quarter, hotel openings plunged sharply again between July and September across the Southeastern United States. Only 26 hotels, totaling nearly 2,800 rooms, opened across the region, a 40% decrease compared to the same period last year.
The transaction volume for U.S. hotels topped $4.3 billion in the third quarter, a 33% drop from a year ago, and $1 billion below the second-quarter results.
The U.S. hospitality industry’s post-pandemic recovery has entered a new phase, as growth in revenue per available room, or RevPAR, across the top 25 hotel markets continues to slow.
U.S. hotel revenue per available room fell 6.6% in the week of Sept. 21-27. The decrease was mostly due to declining occupancy — which was down 2.8 percentage points — but was worsened by a 2.5% retreat in average daily rate.
Kickoff for the 2026 FIFA World Cup still is several months away, but there are some key upcoming dates that hoteliers should circle on their calendars if they want to score their performance goals.
The average time to build a hotel in the U.S. is taking longer, affecting costs for developers and making new hotels riskier. A longer construction timeline increases the chance for increasing costs, be it from weather impacts, increasing tariffs on furniture, or construction labor shortages.
Hotel construction activity is strong across the Carolinas, with nearly 7,700 rooms under construction across roughly 70 properties and over 20,000 rooms in final planning. Some 22 projects are expected to open by year-end, accounting for just over 2,200 rooms.
U.S. hotel revenue per available room fell again in the week of Sept. 14-20, and the 1.4% decline was only slightly less than the previous week. Hotel occupancy once again drove the decline, falling 0.7 percentage points, although average daily rate also dipped 0.3%.
Keystone Law hosted a panel discussion on 16 September, during which hospitality leaders and legal experts gathered to explore how hotel agreements can be future-proofed in an industry shaped by rapid change, evolving guest expectations and increasingly sophisticated investors. The panel was moderated by Philip Camble of Whitebridge Hospitality and included: Winston Zahra, Troo Hospitality; Timothy Walton, Marriott International; Alyona Antonenko, Keystone Law; and Jens Blomdahl, KSL Capital Partners.
The San Antonio hotel market remained in a holding pattern throughout August, with performance metrics reflecting a challenging operating environment. Revenue per available room, or RevPAR, over the 12-month average declined 1.7% year over year, driven primarily by a 3.4% drop in occupancy. The average daily rate, or ADR, increased by just 1.8%, suggesting that hoteliers have largely maintained rate integrity while demand has weakened.