The CBRE Hotel Brand Performance 2025 report reveals that rapid hotel brand expansion and rising loyalty memberships have failed to translate into real revenue gains, with inflation erasing a decade’s worth of growth. Performance gaps between top- and bottom-tier brands are widening, with upper-midscale properties and guest-friendly perks like free breakfasts emerging as consistent winners.
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GLOA new CBRE Hotels Research report finds that despite rapid growth in hotel brands and loyalty memberships over the past decade, revenue performance is lagging behind inflation, and the gap between top- and bottom-performing brands is widening. The Hotel Brand Performance 2025 study, covering 50 brands across six major hotel companies, offers a sobering look at how brand proliferation is reshaping industry economics.
Brand Growth Doesn’t Guarantee Revenue Gains
Since 2014, major hotel groups have doubled their brand portfolios, now averaging 24 brands each, while loyalty memberships have surged at a 15% compound annual growth rate (CAGR). Yet, the fastest-growing brand family by number of brands posted the weakest median revenue per available room (RevPAR) growth—just 0.3% since 2019. CBRE’s analysis suggests that simply adding more brands can dilute performance, especially when new concepts cannibalize existing properties.
Inflation Wipes Out Real Gains
Between 2019 and 2024, nominal RevPAR across the brand families studied rose 9.3%, but inflation-adjusted RevPAR fell by 10.9%. Alternative lodging options and increased hotel supply have eroded pricing power, leaving operators struggling to convert demand recovery into real revenue growth.
Widening Performance Gap
From 2014 to 2019, over half of the brands outperformed the sample’s average RevPAR growth. Since 2019, that share has dropped to just 28%. The spread between the strongest and weakest brand families reached a cumulative 26% difference over the past decade, a disparity that can mean the difference between profitability and loss for owners.
Upper-Midscale Segment Leads
Upper-midscale brands have emerged as consistent winners, posting the highest RevPAR CAGR both before and after the pandemic—2.2% from 2014 to 2019 and 2.3% from 2019 to 2024. Their appeal lies in strong brand recognition, flexible customer bases, and simplified operations, along with consumer-friendly features like free breakfasts and no resort fees.
Free Breakfast Boosts Occupancy and Revenue
In the mid-tier segment, hotels offering complimentary breakfast enjoy 2–3 percentage points higher occupancy and more than double the RevPAR growth of competitors without it. While the gross operating profit (GOP) advantage is less certain, free breakfast clearly resonates with guests.
Midscale and Economy Chains Face Closures
These lower-tier segments are seeing both declining RevPAR and property closures. CBRE notes that this supply reduction may ultimately rebalance the market, paving the way for leaner, more profitable prototypes in the future.
Strategic Takeaways for Investors
CBRE advises hotel owners and developers to:
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Analyze brand and brand family performance over 5–10 years.
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Focus on proven performers and avoid over-reliance on new, untested brands.
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Consider performance-based franchise agreements.
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Explore soft brand affiliations, which have seen 42% growth in the past year alone.
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Be more agile in brand commitments, as long-term flag deals may lose appeal in today’s shifting market.
The CBRE Hotel Brand Performance 2025 report warns that brand proliferation is not a guaranteed path to higher RevPAR, especially after inflation. Investors should focus on proven brand families, with upper-midscale brands and guest-friendly offerings like free breakfasts emerging as consistent winners.
Source: CBRE
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