Colliers Report Finds U.S. Hotel Sector Entering More Selective, Strategic Phase

Hospitality Net

6 days ago

Colliers, a leading diversified professional services and investment management company, released its 2025 Hospitality Outlook, which shows continued recovery in the U.S. hospitality industry over the past year. The report highlights improving financial health for hospitality assets, particularly in the Northeast and Central regions – driven by leisure travel and the return of conferences and events.
From April 2024 to March 2025, U.S. hotels saw revenue per available room (RevPAR) rise 2.4%, average daily room rates (ADR) increase 1.9%, and occupancy also ticking up slightly. While some regions are still catching up to pre-pandemic demand, others are regaining previous cyclical highs.
Regional Highlights:
The Northeast and Central regions led the country in occupancy growth at 1.3%, as cities like New York, Chicago and Nashville benefited from both leisure and business travel.
The South accounts for over 51% of all rooms under construction, driven travel and investor demand in the sunbelt.
In the West, ADR are nearly 20% higher than pre-pandemic levels with hotelier's focusing on rate growth vs. occupancy gains.
We're seeing performance diverge by region and asset type, which is creating targeted opportunities for investors who understand how to navigate today's complexity and capitalize on long-term fundamentals. Mark Owens, Vice Chair, Capital Markets, Colliers
The report notes a modest decline in consumer travel spending, with lodging down 2.5% and airfare down 6% year-over-year. International travel may also face short-term challenges tied to economic conditions, particularly in global gateway markets, but strong domestic demand — especially for leisure and group travel — continues to support sector performance. While new supply remains active in select regions, rising costs and more selective lending are slowing development elsewhere, helping bring supply and demand into better balance.
As the hospitality sector continues to evolve, investors, developers and operators will need to balance near-term dynamics with long-term opportunity. From shifting traveler behavior to new roles in mixed-use environments, hotels are helping shape the future of real estate.
To read the full 2025 Hospitality Outlook from Colliers, visit: https://www.colliers.com/en/research/nrep-ushsp-hospitality-report-2025
About Colliers International
Colliers International is a global leader in commercial real estate services, with over 15,800 professionals operating out of more than 485 offices in 63 countries. A wholly owned subsidiary of The National Investor, one of Abu Dhabi"s leading investment management and advisory firms, Colliers International delivers a full range of services to real estate users, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services and insightful research. The latest annual survey by the Lipsey Company ranked Colliers International as the second-most recognized commercial real estate firm in the world. In MENA Colliers International has corporate offices in the United Arab Emirates, Saudi Arabia and Egypt.