- In Q1, despite economic and geopolitical uncertainties, the U.S. market for hotels saw a 0.4% increase year-over-year in occupancy rate. This was driven by a growth of 1.0% in demand.
- Revenue per available room rose by 2.2%, due to an increase of 1.9% in the average daily rate and a slight rise in occupancy.
CBRE’s Q1 report shows that the U.S. Hotel market is resilient in the face of geopolitical and economic uncertainty. The first-quarter occupancy rate of hotels increased by 0.4%, with a demand increase of 1% exceeding the supply growth of 0.6%. The average daily rate (ADR), which was up 1.9%, combined with a marginal increase in occupancy resulted in an increase of 2.2% in revenue per room available (RevPAR).
The first quarter saw an increase in business travelers, partially offset by the decline in international visitors in March of 11.6%. In spite of this, demand for alternatives to traditional lodging, like short-term rentals or cruise lines, has grown faster than the hotel industry. From Q1 2019, these alternatives have seen demand grow by 45% and 9%, respectively.
In Q1, hotel wages grew at a rate of 4%, which is the same as the national average. The number of job openings in hotels fell by nearly 9%, from 17 to 15. Despite this, all types of locations continued to fall short on Q1 2019 occupancy levels. However, except for resorts all saw an increase in occupancy from Q1 2018 to Q1 2019. Urban locations reached 92% 2019 levels, while interstate locations came closest to pre pandemic levels with 99.5%.
RevPAR growth was also affected by special events and circumstances. RevPAR in New Orleans was boosted by the Super Bowl, while Hurricane Relief efforts helped Tampa. Columbus, Washington D.C. and West Palm Beach ranked among the top five RevPAR-growth markets in Q1 of 2025. This was likely due to demand from the presidential inauguration.
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