US hotel performance rebounds around the country as demand soars

It was a good week for hotel industry across the U.S. as 2025 travel began in earnest after the holiday hangover.

U.S. hotel revenue per available room made a comeback for the week ending Jan. 18, rising 17.2% year over year after a 13.1% slide in the week prior. Occupancy rose 3.2 percentage points and average daily rate increased 5.1%. Both metrics contributed with impacts from the MLK holiday weekend calendar shift, the return of conference and events – a significant impact in San Francisco – and the presidential inauguration weekend in D.C.

Making up for the previous week when the top 25 U.S. hotel markets saw the largest decline, this most recent period was all about the major markets with RevPAR advancing 26.6%. San Francisco led the way with a whopping 348.3% RevPAR gain due to the calendar shift of the J.P. Morgan Healthcare Conference, which occurred a week earlier last year. Excluding San Francisco, RevPAR in the top 25 markets was still up double-digits (+17.9%), the result of occupancy and ADR gains. Hotels in Washington, D.C., posted the second highest RevPAR increase, up 83.9% for the week leading up to the inauguration with weekend RevPAR rising 224.4%, driven primarily by ADR, which jumped 142.8%.

Across the country, weekend days Friday and Saturday showed the largest RevPAR increases – up 25.2% – driven in part by the MLK holiday. This was followed closely by weekdays Monday to Wednesday, which were rose 23.4%. RevPAR on the shoulder days Sunday and Thursday was essentially flat, down just 0.7%. This pattern was seen in both the top 25 markets and the rest of the country. Even when excluding the strong weekday performance of San Francisco, and the weekend in Washington, D.C., the top 25 markets saw strong weekend and weekday performance.

Hotel demand in the greater Los Angeles area – the STR-defined markets there are Los Angeles, California Central Coast, Inland Empire, and Orange County – remained elevated, up 7.5% from Jan. 7-18. In absolute values, occupancy since Jan. 7 averaged 65.5% versus 61.2% a year ago. Several submarkets, however, are seeing sharp gains, including Pasadena/Glendale/Burbank, where demand is up 33.6% since the start of the wildfires with double-digit gains nearly every day.

Other markets with double-digit hotel demand gains include Los Angeles East – between Pasadena and San Bernardino – Oxnard/Ventura, Los Angeles North (San Fernando Valley), Palm Springs, Santa Barbara, Newport Beach/Dana Point, Riverside/Sab Bernardino, and others. On average, hotel occupancy is running 10 points higher in those submarkets than a year ago.

On the flip side, over the past 12 days hotel demand is down 7.7% in Los Angeles Downtown and down 15.8% in Hollywood/Beverly Hills. Although the weekend was positive for downtown hotels.

Overall, RevPAR in the greater LA area is up 9.3% since the start of the fires, led mostly by occupancy gains with a few exceptions. Of the 24 submarkets in greater Los Angeles, five have seen negative RevPAR changes since the fires began: Disneyland (-19.1%), Los Angeles Central Business District (-8.2), Anaheim (-3.8%), Los Angeles Airport (-3.6%) and Orange County Northwest (-2.2). For the week ending Jan. 18, nine submarkets were reporting negative RevPAR comparisons with tourist areas seeing the largest decreases.

RevPAR in the 13 markets affected by either Hurricane Helene or Hurricane Milton continued to see elevated performance with RevPAR up 13.9% on an occupancy gain of 11.1 percentage points and ADR growth of 10.2%. The highest weekly RevPAR increase was a 72.6% jump seen in Greenville/Spartanburg, South Carolina, with 12 of the 13 markets seeing double-digit growth. Overall, these markets have seen double-digit RevPAR gains in all but one week since the week after Hurricane Helene’s landfall.

All hotel chain scales benefited from the strong week with RevPAR gains ranging from a high of 37.7% for luxury to 6.4% in economy hotels. Luxury received an extra lift from San Francisco’s strong week while midscale and economy chains continued to see strong performance from the 13 markets affected by Hurricane Helene and Hurricane Milton. Excluding San Francisco and the hurricane markets, the chain scale key performance indicators reveal a similar yet more muted pattern with a RevPAR range of a 24.9% jump in luxury to a 1.1% lift in economy hotels.

Across luxury and upper-upscale hotels, group occupancy was up 4% from the same week last year with the top 25 U.S. hotel markets recording an increase of 5.6%. A total of 22 of the top 25 markets posted group occupancy increases. ADR advanced 29.8% across the top 25 markets, boosted by San Francisco’s group ADR, which soared 391.9% to $1,342. Transient occupancy also recovered 2.1 percentage points after last week’s decrease, when it fell 2.5 percentage points. Markets outside the top 25 posted stronger performance with occupancy up 2.6 percentage points while the top 25 increased 1.6 percentage points in occupancy.

We expected this week to be better than last and it certainly was. Next week’s data should show another slowdown due to the MLK holiday on Jan. 20. Occupancy on the books for next week reflects this slowdown with the measure down 2.3 percentage points in the top markets compared with the same week last year. Remember that the holiday was a week later this year.

Washington, D.C, hosting the Presidential Inauguration, is one market that will see a boost. The Los Angeles fires will continue to affect the market and surrounding areas. Displaced residents and recovery workers will continue to fill hotels around the greater Los Angeles area. However, some submarkets like Los Angeles Central Business District, Hollywood/Beverly Hills, Disneyland, and other tourist areas will likely see a short-term decrease in demand.

Excluding U.S. hotels, global weekly RevPAR increased 8.1%, driven entirely by ADR gains as has been the case for the past 12 months.

• Japan’s hotels once again posted the largest RevPAR gain (+34.7%), with all 11 STR-defined markets in the country seeing growth. ADR continues to be the main driver of this growth, which is fueled in part by the weaker yen.
• Since the U.S. Thanksgiving holiday, hotels in Mexico have continued to see strong performance, as RevPAR increased 22.5% this week. The Mexican Caribbean again saw the largest gain of any market in the region. Similar to Japan, ADR is driving the growth, which is likely due to weakening of the peso to the dollar. Demand for the country was down for a second consecutive week.
• Germany rebounded after a decline the prior week with RevPAR rising 18.5% on ADR. Munich was by far the top-performing market – hotel RevPAR jumped 163.5% – due in part to the shift of the Digital Life Design conference.
• Indonesia posted double-digit RevPAR growth lifted by three of the four largest hotel markets in the country: Bali (+18.5%), Jakarta (+12.8%) and East Java (+10.6%).
• Italy rounded out the list of key hotel markets posting double-digit RevPAR growth (+10.8%) with gains seen across 12 of 14 markets.
• China’s performance was flat with its top two markets, Shanghai and Beijing, recording RevPAR gains.

In the weeks to come, hotels in Japan, Mexico and Indonesia are expected to see ADR-driven RevPAR, due in part to their weak currencies. Countries in Europe should see a return to normal business patterns which will produce more stable performance.
Isaac Collazo is senior director of analytics at STR. Chris Klauda is senior director of market insights at STR.

This article represents an interpretation of data collected by CoStar's hospitality analytics firm, STR. Please feel free to contact an editor with any questions or concerns. For more analysis of STR data, visit the data insights blog on STR.com.

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