CBRE Hotels forecasts steady growth in 2025

Urban locations continue to outperform due to improved group and business travel and continued recovery of inbound international travel

CBRE Hotels Research forecasts steady growth in the U.S. hotel market through 2025, citing improving business and group travel as key drivers. Urban hotels are expected to outperform the overall market, benefiting from increased international inbound travel. Economic factors such as GDP growth, inflation, and constrained hotel supply due to high financing and construction costs also contribute to CBRE's projections.

Key takeaways

• Revenue growth: U.S. hotel RevPAR is forecast to increase 2% year-over-year, with urban hotels expected to see a stronger increase of 2.8%;
• Occupancy & ADR: Occupancy is forecast to increase 0.23 percentage points, while ADR is expected to increase 1.6% year-over-year;
• Market drivers: Increased business travel, international arrivals and limited new hotel supply will support pricing power;
• Economic outlook: CBRE forecasts U.S. GDP growth of 2.4% and inflation of 2.5% in 2025;
• Potential risks: Tariffs, labor shortages and Federal Reserve policy changes could impact hotel supply and pricing dynamics;
• Long-term growth: CBRE expects U.S. RevPAR to grow 1.5% to 3.5% annually over the next several years, barring a recession;
• Comparison to STR: STR's most recent forecast is close to CBRE's, forecasting 1.8% RevPAR and 1.6% ADR growth for 2025.

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