US Hotel Industry Slump Deepens as Global Markets Diverge

International Hotel News: Declines Continue Across US Hotels

The U.S. hotel industry has endured yet another challenging week, with revenue per available room (RevPAR) dropping 1.4% for the week ending 20 September 2025. This downturn is mainly attributed to lower occupancy, which slid by 0.7 percentage points, while the average daily rate (ADR) edged down 0.3%. This International Hotel News report notes that RevPAR has now been negative year-over-year in 16 out of the first 20 days of September and in 100 of the past 143 days since May. Occupancy, which has dipped on 118 days during this stretch, continues to weigh heavily on results. ADR, although steadier, has only outpaced 1% growth 40 times and surpassed inflation on just five occasions.

US hotel sector continues to struggle as global markets deliver mixed signals
Image Credit: StockShots

Top 25 Markets Add Pressure

Performance in the Top 25 Markets (T25) worsened the national decline, with RevPAR falling 2.8%. New Orleans led the losses with a 22.4% drop, largely driven by weak football weekend bookings. Houston alone contributed 30 basis points to the nationwide fall, while Oahu, Miami, and Washington, D.C. also registered double-digit declines. In these cities, occupancy softness paired with weekday and weekend ADR decreases drove down overall revenue.

Bright Spots Beyond the Top 25

Outside the T25 markets, a few regions managed to buck the trend. Louisiana North surged with a 22.5% increase in RevPAR, supported by strong occupancy growth in Shreveport, Bossier City, and Alexandria. Buffalo also enjoyed a 21.7% RevPAR spike, aided by an NFL game. Yet other markets, like Columbia, SC, saw extreme swings, suffering a 45.5% RevPAR drop following a sharp gain the week before due to shifting football schedules. Despite these isolated wins, 87 markets still posted declines, only slightly better than the 93 markets reporting decreases the prior week.

Mixed Signals in Global Markets

International performance offered a more varied picture. Global RevPAR rose 5.6% for the week, albeit at a slower pace than the previous week. Occupancy gains supported the lift, while ADR growth remained subdued at around 1%. China rebounded in occupancy but showed sluggish ADR, partly due to last year’s Mid-Autumn Festival distortions. Europe fared better, with Germany’s RevPAR boosted by major events like the drinktec trade fair and BMW Berlin Marathon. France also saw healthy growth, while Canada continued steady progress with a 3.4% gain led by ADR. In contrast, Australia, Italy, and Mexico lagged behind, with Mexico City dragging national results down by 16%.

Outlook Remains Difficult

Looking ahead, the U.S. hotel sector faces a daunting short-term future. Seasonal religious observances, along with tough year-over-year comparisons linked to last year’s Hurricane Helene, are expected to hold back recovery. While September’s month-to-date RevPAR shows a 0.8% rise, this comes largely from a calendar shift, and when matched day-to-day, RevPAR is actually down 1.3%. Internationally, however, the outlook remains more optimistic, with overall RevPAR projected to continue climbing in the coming weeks.

The persistent struggles in the U.S. hotel industry highlight both the vulnerability of domestic markets and the growing divergence from global trends. With most U.S. cities still unable to stabilize occupancy and rates, recovery may hinge on external factors like major events, seasonal travel boosts, and international visitor demand. Without stronger economic signals or a rebound in business travel, U.S. hoteliers may continue facing choppy waters even as international markets find more stable footing.

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