The firm forecasts a 1.3% rise in RevPAR next year, with occupancy inching up by 14 basis points and the average daily rate (ADR) increasing by 1.2% year-over-year. This marks a slight downgrade from CBRE’s February forecast, which projected 2.0% RevPAR growth, including a 21-bp occupancy gain and a 1.6% rise in ADR.
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GLOCBRE is projecting modest growth in hotel revenue per available room (RevPAR) in 2025, with urban markets expected to continue outperforming, thanks to a rise in group and business travel. Increased demand for regional leisure and drive-to destinations is also anticipated to support gains.
The firm forecasts a 1.3% rise in RevPAR next year, with occupancy inching up by 14 basis points and the average daily rate (ADR) increasing by 1.2% year-over-year. This marks a slight downgrade from CBRE’s February forecast, which projected 2.0% RevPAR growth, including a 21-bp occupancy gain and a 1.6% rise in ADR.
The revised outlook reflects expectations of slower economic growth—CBRE now anticipates U.S. GDP will expand by 1.4% in 2025, down from a previous estimate of 2.4%. Inflation is projected at 2.9%, 40 basis points higher than initially forecast. Despite these headwinds, economic conditions are still strong enough to support steady hotel sector performance.
“Despite uncertainty in the global economy and geopolitical landscape, several factors are expected to support RevPAR growth,” said Rachael Rothman, CBRE’s Head of Hotel Research & Data Analytics. “A rebound in group and business travel, combined with a weaker dollar and lower airfare, could encourage both domestic travel and increased international visitation. These trends will likely benefit urban hotels, regional resorts, and drive-to destinations the most.”
Looking further ahead, CBRE forecasts annual RevPAR growth of 1.0% to 3.0% over the next few years. Major upcoming events—including the 2026 FIFA World Cup, the U.S. Semiquincentennial in 2026, and the 2028 Summer Olympics—along with new attractions such as an Orlando theme park, are expected to stimulate travel demand. National parks, gateway cities, and leisure markets will continue to be key drivers of this momentum—provided no major economic disruption occurs.
Michael Nhu, Senior Economist and CBRE’s Head of Global Hotels Forecasting, added: “Although near-term demand growth may be slower, hotel supply is also expected to remain constrained due to rising construction and financing costs, along with labor shortages. This dynamic will enhance pricing power and increase the value of existing assets.”
CBRE expects hotel supply to grow at an average annual rate of 0.8% over the next four years—half the industry’s historical average. A further slowdown in demand or a spike in construction costs could suppress supply growth even more.
In response to evolving travel patterns, CBRE’s latest forecast incorporates 11 new leisure-centric markets, including Boulder, Colorado’s ski regions, California’s wine country, the Florida Panhandle, and Utah’s national parks—highlighting emerging opportunities in domestic leisure travel.
Source: CBRE
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