09
News
www.asianhospitality.com
September 2025 | Issue 240
oStar and Tourism Economics lowered U.S. hotel growth
projections for 2025 and 2026, citing reduced demand
from uncertainty, inflation, year-over-year
comparisons and shifting travel patterns. The economic
outlook is expected to remain stable, with hotel
performance likely to recover as trade talks conclude
and the Big Beautiful Bill Act takes effect.
The forecast released at the 17th Annual Hotel Data
Conference lowered 2025 growth projections—demand
by 0.6 points, ADR by 0.5 and RevPAR by 1.1—citing
underperformance and macroeconomic conditions.
Similar revisions were made for 2026, with demand
down 0.5 points, ADR 0.3 and RevPAR 0.7.
“Unrelenting uncertainty and inflation, coupled with
tough calendar comps and changing travel patterns,
have caused lower demand,” said Amanda Hite, STR
president. “Additionally, as the year has unfolded, we’ve
seen rate growth converge closer with demand. We
expect little change in the economic outlook over the
next 18 months, but we are optimistic that once trade
talks have concluded and the impact of the budget
reconciliation bill comes to fruition, hotel performance
will recover.”
Aryan Ryan, director of industry studies at TE, said
the slowing U.S. economy should absorb tariff impacts
without entering a recession.
“The current environment—characterized by slowing
consumer spending, reduced business capital spending
and declining international visitation—will transition
to one boosted moderately by tax cuts and less policy
uncertainty as we look to 2026,” he said.
“While our GOPPAR forecast remains unchanged
from the previous revision, GOP margins were revised
down 0.3ppts for 2025 and 2.3ppts for 2026, mainly due
to a potential increase in expenses, particularly F&B,”
Hite said.
In June, CoStar and TE lowered 2025–26 U.S.
hotel growth projections due to first-quarter
underperformance and macroeconomic factors,
revising supply down 0.1 percent, demand 0.6 percent, ADR 0.3
percent and RevPAR 0.8 percent.
CoStar, TE cut growth projections
on slowing demand
Forecast calls for stability as trade talks conclude, BBB takes effect
CoStar and Tourism Economics cut their 2025–26 U.S. hotel
growth projections due to reduced demand.
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Jaimesh Patel
Owner & hihotels Advisory Council member
Red Carpet Inn, Gibbstown, NJ
Joined brand in 2018