STR and Tourism Economics have downgraded their U.S. hotel forecast for both full-year 2025 and 2026, citing "elevated macroeconomic concerns" and first-quarter hotel performance that undershot prior projections, the companies announced Monday. Separately, Lodging Analytics Research & Consulting also on Monday lowered its full-year 2025 U.S. hotel forecast.
STR parent company CoStar and Tourism Economics now project 2025 U.S. hotel occupancy to decline year over year to 62.8 percent from 63 percent in 2024. The companies in their prior forecast in January projected 2025 occupancy of 63.1 percent.
The companies also now project 2025 U.S. average daily rate to increase 1.3 percent year over year, compared with its prior forecast of 1.6 percent. They now forecast 2025 revenue per available room to increase 1 percent year over year, also down from 1.8 percent in the January forecast.
STR president Amanda Hite at New York University's annual International Hospitality Industry Investment Conference on Monday cited softer-than-expected first-quarter occupancy in the upscale and upper midscale tiers as part of the companies' impetus to revise the forecast.
"The first quarter of this year just did not come quite as strong as what we had anticipated, so we did need to revise the forecast down," Hite said.
Still, Hite noted that the company projects a year-over-year increase in 2025 demand for U.S. hotels and said RevPAR year to date through April rose from prior-year levels at a faster pace than it did last year.
"It's in a much better position than it might feel like if you're reading the headlines right now as we look forward," Hite said. She added that the booking pace for June hotels stays looks "solid" but somewhat softer for July and August, and said that could reflect a shortening booking window.
STR and Tourism Economics forecast 2026 occupancy to rise to 63 percent, ADR to increase 1.3 percent year over year and RevPAR to increase 1.5 percent.
LARC Cuts Forecast
LARC, meanwhile, projected 2025 U.S. hotel occupancy to decline 0.8 percent from 2024 levels, ADR to increase 2.1 percent and RevPAR to increase 1.3 percent. In the company's most recent prior forecast in March, it projected 2025 occupancy to decline 0.6 percent year over year, with an ADR increase of 3.7 percent and a RevPAR increase of 3.1 percent.
LARC president and co-founder Ryan Meliker in a letter to clients cited "a substantially reduced economic outlook" as a reason for the forecast downgrade.
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Meliker in the letter pointed to three factors affecting the economy, "all tied to the current presidential administration's policies:" the imposition of tariffs with ambiguity about their scale and duration, a reduction in federal government spending and the pullback in inbound international U.S. travel demand.
Additionally, "slowing business investment and declining corporate profits are likely to limit business spending and corporate transient demand," according to Meliker.