Dive Brief:
- In the first quarter of 2025, U.S. hotel RevPAR growth remained positive despite geopolitical and economic uncertainty, according to data released Wednesday by CBRE.
- RevPAR grew 2.2% year over year on the back of a 1.9% increase in ADRs and a slight bump in occupancy in the first quarter of 2025, according to CBRE. Increased business travel in March, however, due to the Easter holiday falling in Q2, was partially offset by an 11.6% decline in inbound international travelers.
- CBRE’s findings echo the optimism some hotel CEOs have shared on recent first-quarter earnings calls. Speaking Wednesday on the impacts of economic volatility, Caesars Entertainment CEO Tom Reeg said: “We just can’t see it in our business yet.”
Dive Insight:
Overall, U.S. hotel occupancy rose 0.4% year over year in Q1 as demand growth of 1% outpaced supply of 0.6%, per CBRE. Notably, however, demand for alternative accommodations such as short-term rentals and cruise lines grew more quickly than demand for traditional hotels in the quarter, according to the report.
The report also signalled possible relief for hoteliers struggling to staff their properties, noting that job openings per hotel fell nearly 9% in Q1. The average hourly hotel wage, meanwhile, grew 4% year on year in the quarter — but was nearly $11 less than the national average wage, CBRE noted.
For the full quarter, inbound international travel rose slightly year on year. But in March, for the first time in four years, year-on-year average daily airline passenger volumes dropped, per CBRE.
New Orleans; Tampa, Florida; and Columbus, Ohio, were the top three markets for Q1 RevPAR growth, respectively. The Super Bowl boosted New Orleans’ performance, while hurricane relief efforts likely boosted Tampa’s, according to CBRE.
Eight of the quarter’s top 10 markets for RevPAR growth recorded double-digit growth — and four of them were in the South, per the report.
President Donald Trump’s tariffs and other moves from his administration could further impact travel demand, and hotels’ pricing power, in coming months, experts have told Hotel Dive.
Earlier this week, though, CEOs from Hilton, Caesars and MGM Resorts International all expressed optimism about their businesses on Q1 earnings calls.
“My own belief is you will see some of that, if not a lot of that, uncertainty wane over the next couple quarters, and that will allow the underlying strength of the economy to shine through again,” Hilton CEO Chris Nassetta said Tuesday.
Wyndham Hotels & Resorts and Hyatt Hotels, however, both lowered RevPAR growth expectations for the year.
