For the first time since 2020, U.S. hotel performance moved backward. CoStar’s final 2025 data shows occupancy down 1.2 percent to 62.3 percent and RevPAR slipping 0.3 percent. ADR rose slightly, but mostly just enough to keep up with inflation.
This slowdown was telegraphed months ago. CoStar, Tourism Economics, and PwC all downgraded their outlooks, and 2026 isn’t shaping up as a rebound year. Supply is growing faster than demand, costs remain elevated, and margins are tightening. Growth now has to be earned.
The market split is widening. New York City continues to outperform with strong rate-driven growth. San Francisco is finally showing life after a long recovery. Las Vegas, meanwhile, saw ADR drop 4.3 percent and RevPAR fall nearly 11 percent. Hawaiʻi landed somewhere in the middle: 2025 ended with modest statewide gains, with occupancy up slightly to 73.9 percent and RevPAR higher by 1.5 percent. Performance remained uneven across islands, as Oʻahu’s RevPAR softened by 1.3 percent while Maui, the Island of Hawaiʻi, and Kauaʻi all saw gains, led by a 7.5 percent RevPAR jump on the Big Island.
Add some macro noise, and the picture gets shakier. A 43-day federal government shutdown in late 2025 wiped out more than $1 billion in hotel revenue. And with the 2026 World Cup approaching, even the talk of a potential boycott tied to geopolitical tensions is a reminder of how fragile international demand can be. So much for mega-events being a silver bullet, even after a FIFA “peace prize.”
