US Lodging Market Ready To Shatter Records With Unstoppable Growth Driven By Landmark Global Events And Rapid Regional Travel Surges

Published on May 17, 2025

The US hotel industry is on the brink of an extraordinary growth phase, fueled by a powerful resurgence in business travel and an explosive surge in leisure demand. With landmark global events and rapidly expanding regional destinations driving unprecedented visitor numbers, urban hospitality hubs and emerging vacation hotspots alike are set to experience monumental revenue gains. Despite economic challenges, strategic supply management and evolving traveler behaviors position the lodging sector for unmatched expansion and long-term success, redefining the future of hospitality in America.

CBRE Predicts Modest Growth for U.S. Hotel Industry in 2025 Driven by Urban and Regional Leisure Demand

The U.S. lodging industry is expected to experience modest growth in 2025, according to the latest forecast from CBRE, a global leader in commercial real estate services and investment. Revenue per available room (RevPAR), a critical metric for hotel performance, is projected to rise moderately, supported primarily by strong demand in urban markets fueled by business and group growing enthusiasm for nearby getaways and regional leisure spots accessible by car.

Projected Performance Metrics for 2025

CBRE anticipates a 1.3 percent increase in RevPAR for the year, signaling a more tempered pace of growth compared to earlier forecasts. This increase is driven by an anticipated rise of 0.14 percentage points (14 basis points) in occupancy rates along with an estimated 1.2 percent growth in the average daily rate (ADR) on a year-over-year basis. While these figures represent a healthy expansion, they are softer than CBRE’s February 2025 forecast, which had anticipated a two percent growth in RevPAR, driven by a 21-basis-point improvement in occupancy and a 1.6 percent rise in ADR.

Economic Conditions Underpinning Forecast

The revised outlook reflects the broader economic landscape, which has slowed since early 2025. CBRE’s revised projection incorporates a slower GDP growth of around one point four percent for the year, lowered from the earlier forecast of two point four percent. Inflation expectations have also increased, with the average inflation rate projected at 2.9 percent for 2025—forty basis points higher than anticipated in the February forecast. Despite this deceleration, economic growth remains sufficient to sustain healthy demand in the lodging sector.

The moderation in GDP growth signals a more cautious consumer and business environment. However, the forecast suggests that economic activity will remain robust enough to support travel and hotel stays, particularly as sectors such as business meetings, conventions, and leisure travel continue to recover and expand.

Long-Term Outlook and Key Demand Drivers

Looking beyond 2025, CBRE’s projections suggest that RevPAR growth will stabilize between one and three percent annually over the next several years. Several high-profile events and developments are expected to provide sustained demand boosts. Among these are the 2026 FIFA World Cup expected to draw visitors from around the world, the United States’ 250th anniversary in 2026 showcasing a wide array of cultural and entertainment events, and the 2028 Summer Olympics, which promise to generate substantial travel and hospitality activity.

Additionally, new tourism infrastructure is set to enhance destination appeal. For example, the opening of a major theme park in Orlando, Florida, along with other new attractions nationwide, will likely draw significant visitor numbers. The lasting appeal of national parks, key gateway cities, and domestic vacation spots continues to bolster a strong outlook, with an increasing number of travelers drawn to nature adventures and nearby escapes.

CBRE’s forecast assumes these demand drivers will sustain momentum unless an unforeseen economic downturn occurs, such as a severe recession or geopolitical disruption.

Supply Growth Trends and Industry Capacity

On the supply front, CBRE anticipates that hotel room expansion will stay limited over the coming four years, growing at an average rate of approximately 0.8 percent per year. This rate is notably slower than the historical average supply growth for the U.S. lodging market, which traditionally runs around 1.6 percent per year. The deceleration in supply growth reflects cautious development trends influenced by higher construction costs, labor shortages, and capital constraints.

If demand softens or construction expenses rise unexpectedly, supply growth could slow even further. Such dynamics would likely improve the balance between room availability and demand, potentially supporting pricing power and profitability for existing hotels.

Emerging Leisure Markets and Travel Trends

Reflecting shifts in travel preferences, CBRE has expanded its coverage to include eleven new leisure-oriented markets in the latest forecast update. These additions encompass diverse and rapidly growing destinations such as Boulder, Colorado, and nearby ski resorts, renowned California wine country regions, the Florida Panhandle’s beach communities, and the national park areas in Utah. These markets represent emerging opportunities fueled by growing consumer interest in outdoor activities, nature-based tourism, and regional escapes accessible by car.

This inclusion underscores evolving traveler priorities toward wellness, scenic beauty, and experiential vacations. Leisure travelers increasingly favor destinations that offer a blend of adventure, relaxation, and local culture, contributing to vibrant demand patterns in these newly added markets.

Forecast Methodology and Scenario Planning

CBRE’s Hotel Horizons report for May 2025 covers 65 major U.S. markets, incorporating data from six hotel chain scales and multiple location types. This comprehensive analysis provides industry stakeholders with actionable insights into performance expectations, investment potential, and market dynamics.

It is important to note that CBRE’s baseline forecasts do not assume the occurrence of significant adverse events such as an international war or a widespread recession. However, the firm also develops alternative scenarios to account for both upside and downside risks. These scenario analyses help investors, operators, and developers prepare for varying economic conditions and demand shocks.

Implications for Hotel Operators and Investors

The modest yet steady growth outlook for 2025 and beyond presents a cautiously optimistic environment for hotel owners, operators, and investors. City hotels positioned to attract growing group and corporate travel are expected to gain the most, boosted by companies restarting face-to-face meetings and gatherings. Meanwhile, hotels in popular regional leisure destinations are expected to capitalize on the continued preference for domestic and drive-to vacations.

With supply growth constrained, existing properties may experience improved market fundamentals, including stronger occupancy rates and pricing leverage. However, the industry must remain vigilant about inflationary pressures, operational cost increases, and potential economic headwinds that could impact consumer spending on travel.

Looking Ahead: Opportunities and Challenges

The U.S. lodging industry’s trajectory over the next several years will be shaped by a combination of macroeconomic factors, demographic trends, and evolving traveler behaviors. Technology adoption, sustainability initiatives, and innovative guest experiences will also play critical roles in differentiating properties in competitive markets.

The anticipated demand surge around major events such as the FIFA World Cup and the Olympics offers unique revenue opportunities but also requires careful planning for capacity management and staffing. Similarly, emerging leisure destinations provide avenues for growth but may necessitate targeted marketing and infrastructure investments to fully realize potential.

Conclusion

CBRE’s latest forecast paints a picture of steady yet cautious optimism for the U.S. hotel industry in 2025 and beyond. While economic growth has slowed from earlier expectations, the lodging sector is positioned to maintain momentum, driven by urban business travel resurgence and evolving leisure travel trends. Supply growth constraints further support balanced market conditions.

As the industry navigates a complex landscape marked by inflation, shifting consumer preferences, and global uncertainties, strategic agility and market responsiveness will be key to capitalizing on growth opportunities. CBRE’s expanded focus on new leisure markets and scenario-based forecasting equips stakeholders with critical insights to make informed decisions amid changing dynamics.

The US hotel industry is poised for explosive growth driven by a booming business travel revival and soaring leisure demand. Landmark events and emerging destinations are set to fuel unprecedented revenue gains despite economic challenges.

For detailed access to CBRE’s comprehensive Hotel Horizons report covering major markets, hotel chain scales, and location types in the U.S., interested parties can visit CBRE’s official platform. The report provides an essential resource for industry participants aiming to understand and capitalize on upcoming trends shaping the hospitality sector.