US Hotel Industry Sees Four Week Slump While Asia and Canada Surge

Hotel News: Weekly Downturn Continues in Key US Markets

The US hotel industry is in the midst of a notable downturn, experiencing its fourth consecutive week of declining revenue per available room (RevPAR), according to the latest STR data for the week ending 19 July 2025. RevPAR dropped by 3.3% year-over-year, slightly better than the previous week’s 3.7% fall, but still indicative of softening demand. This was fueled by a 1.8% reduction in room demand and a 0.7% drop in the average daily rate (ADR). Meanwhile, room supply grew marginally by 0.8%, but occupancy still declined by 1.9 percentage points, settling at 71.6%.

Most hotels across the United States are doing badly with low occupancy rates
Image Credit: StockShots

This Hotel News report identifies that major metro hubs bore the brunt of the downturn, with Las Vegas seeing a staggering 17.1% RevPAR decline due to reduced international arrivals and weakened spending power among lower-income travelers. Houston experienced an even sharper 38.3% year-on-year drop, attributed to difficult comparisons with last year’s surge in demand from Hurricane Beryl and the “Derecho” storm event. Los Angeles followed with an 8.9% decrease, with its Central Business District alone posting a 17.8% decline amid ongoing market disruptions.

Mixed Signals Across Segments and Markets

If Las Vegas, Houston, and Los Angeles were excluded, the national RevPAR dip would have been only 1.9%, and ADR would have slipped by a marginal 0.2%—well below the inflation rate. In fact, among the Top 25 Markets outside these three, RevPAR was nearly flat, showing just a 0.6% drop with a 1.0% ADR gain.

However, metro areas outside the Top 25 showed the steepest fall with a 4.7% RevPAR decline and a 2.8% ADR drop. Rural and non-metro markets also trended down, largely due to occupancy declines. The post-Memorial Day summer season has seen 1.6 million fewer room nights sold compared to last year, representing a 0.7% decrease in demand. Interestingly, while most segments struggled, the Luxury segment stood out with modest RevPAR gains, indicating resilient high-end travel demand.

Global Hotel Sector Bucks the Trend

Outside the US, the global hotel market showed more optimistic signs. RevPAR rose 0.5% globally, thanks entirely to ADR increases, even as occupancy fell by 1.3 percentage points. Nevertheless, global occupancy hit a yearly high of 72.2%. Japan led the global pack, with Osaka outperforming all other cities, boosted by preparations for EXPO 2025. Canada came in strong as well, with nearly half of its markets recording double-digit RevPAR growth.

Spain and the UK also performed well, largely driven by major travel events and tourism demand. In contrast, France and Germany underperformed due to changes in their sporting event calendars. China posted a notable 6.7% RevPAR drop, with Beijing and Guangzhou pulling down national performance.

Shifting Outlook with Measured Optimism

Looking ahead, the US hotel sector faces uncertainty, with upcoming months likely shaped by challenging year-over-year comparisons stemming from last year’s hurricane disruptions. Analysts predict muted short-term growth in certain markets due to sociopolitical variables, but a more optimistic long-term view is emerging. American Airlines CEO Robert B. Isom expects July to represent the lowest performance point for the year, with steady recovery to follow as demand improves month by month.

Despite current pressures, the broader global hospitality sector appears more stable and even thriving in certain regions, giving hope that the US may follow suit in the final quarter of the year.

For more details, refer to the market report at:

https://str.com/data-insights-blog/str-weekly-insights-13-19-july-2025 For the latest on the Hotel industry in various geolocations around the world, keep on logging to Bangkok Hotel News