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Global Occupancy Slowdown; Mixed Performance for U.S. Hotel Industry in Early March 2025: STR Weekly Insight – Image Credit STR
- The U.S. hotel industry saw a flat performance in the first week of March 2025, with modest overall growth of 0.6% in Revenue Per Available Room (RevPAR).
- Lower TSA volumes due to the beginning of Lent and a later spring break, along with inconclusive evidence on the impact of U.S. border travel flows, contributed to the weak finishes.
Global slowdown
Global occupancy, excluding the U.S., slowed to 61.2% (-4.8ppts) while ADR rose 7.3%, netting a decline in RevPAR (-0.5%). Day-of-week patterns showed occupancy falling by more than 5ppts Tuesday through Thursday, then by a lesser amount in the remaining days. ADR was up across all days.
Strong start, weak finish net flat RevPAR in the U.S.
The U.S. hotel industry reported a modest 0.6% increase in Revenue Per Available Room (RevPAR) for the first week of March 2025. The week began strong with year-over-year RevPAR growth above 3% but saw a decline towards the end. Factors contributing to the weak finish include the beginning of Lent and a later spring break, which led to lower TSA volumes.
Among the top 25 markets, New Orleans, Nashville, Los Angeles, and Denver reported double-digit RevPAR gains at the start of the week and declines by the end. Boosted by conventions, Chicago and Anaheim (Orange County) saw double-digit RevPAR growth.
In terms of chain scales, Luxury earned the top spot for the eighth consecutive week with a RevPAR gain of 4%, primarily due to Average Daily Rate (ADR) growth. Group demand in Luxury and Upper Upscale hotels decreased by 1.2%, while ADR rose by 5.2%.
Investigations into the impact of tariffs on U.S. border markets yielded inconclusive results. The impacts of the Los Angeles wildfire and Southeast U.S. hurricane are slowly receding, while global occupancy (excluding the U.S.) has slowed to 61.2%.
The industry is gearing up for peak spring travel with events like March Madness and spring break. Despite some uncertainties like reductions in the federal government and falling consumer confidence, outbound U.S. travel in February was still up, providing a positive outlook for the global hotel industry.
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