Hotel RevPAR Declines Amid Travel Shifts

Executive Summary

• The overall hotel occupancy rate decreased by 1.4% year-over-year in Q2, as supply growth of 0.8% outpaced a 0.6% decline in demand.
• A 1.0% increase in average daily rate (ADR) offset by decreasing occupancy led to a 0.5%drop in revenue per available room (RevPAR). RevPAR decreases in April and June were driven by a steady decline in inbound international travel, an absence of solar-eclipse-related travel like last year and less business travel due to Easter occurring in Q2.
• Demand for lodging alternatives continued to outpace that of traditional hotels. Short-term rentals and cruise lines saw demand growth of 41% and 17%, respectively, from Q2 2019 levels.
• The gap between inbound and outbound international travel widened in Q2 from a year ago, with inbound rising by just 0.5% and outbound increasing by 4.1%.
• Inbound travel growth rates gradually worsened in Q2, with Easter driving an 8.0% year-over-year increase in April followed by declines of 2.8% in May and 3.4% in June. Lagging inbound international travel has been a headwind to hotel demand growth in 2025.
• Hotel wages grew by less than the 4.0% national average wage growth for the fourth consecutive month, increasing by just 3.4% in Q2. Job openings per hotel rose by 2.7% to 14 in June.
• Occupancy rates for all location types were below 2019 levels. Resort locations were at 92% of 2019 levels, while interstate locations were the closest to pre-pandemic levels at 98%.
• The U.S. Open drove RevPAR growth in Pittsburgh, while presidential visits boosted RevPAR in West Palm Beach.

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