STR Weekly Insights: 25-31 May 2025

Analysis by Isaac Collazo, Chris Klauda

All financial figures in U.S. dollar constant currency. 

Highlights

• Normal Memorial Day demand
• West South Central region underperformed the rest of the U.S.
• Weak weekend across all chain scales, even perennial front-runner Luxury 
• Positive demand globally, China a big exception

The days following Memorial Day make for a transitional week with the start of summer break for some and the final days of the school calendar for others. A slightly later end to the school year in more districts this year as well as weak performance in the south resulted in U.S. revenue per available room (RevPAR) falling 1.9% for the week ending 31 May.  

“Normal” Memorial Day followed by a lackluster weekend

Performance over the three-day Memorial Day weekend (Friday – Sunday) was not far off last year with RevPAR down 0.6% even as demand and ADR were up slightly. The difference between this year and last year is supply, which rose slightly more than demand, resulting in a drop in occupancy. Occupancy over the past three Memorial Day weekends has been above 72%, however, from 2014 to 2019, occupancy was above 75%. This year’s room demand for the full Memorial Day weekend was the fourth highest in history and just 148,000 room nights less than the 2019 record. Thus, we concluded that despite the increased uncertainty, this Memorial Day was “normal.” 

RevPAR was up and down after the holiday with Wednesday seeing the only gain of the week (+1.2%). Thursday started a slide that went into the weekend, where RevPAR decreased 4.4% on nearly equal decreases in both occupancy and ADR. The weekend RevPAR decrease was the largest since Easter. We believe that a portion of the decline is due to the later end in a lot of school break calendars. Last year, nearly half of schools were out for the summer before the Memorial Day holiday. This year, 42% were out. That change is due to the midweek Christmas and New Year’s, which resulted in schools starting the spring semester a week later. 

The south heavily impacted the national RevPAR comp

One surprise this week was the overall weak performance in the West South Central region of the U.S., specifically three of the four states (Arkansas, Louisiana and Texas). RevPAR in these three states declined 11.6% on average, impacted by the later summer break, weather issues, convention centers closed for renovation in Austin and Dallas, and conference shifts. Twelve of the 17 markets across the three states posted negative RevPAR comps with New Orleans, Dallas, Austin and the Arkansas Area reporting RevPAR declines of 20% or more. As whole, RevPAR in the West South Central region fell 10.3% during the week and accounted for nearly half of the total U.S. RevPAR decrease. 

Weekend blues across all chain scales, even high performing Luxury

Weekly RevPAR declined across all chain scales, except Luxury. This was the eighth consecutive week that Luxury RevPAR gains exceeded all other chain scales. Conversely, it was the fifth week in a row where Economy chain hotels saw the sharpest decline in RevPAR. 

However, Luxury hotels were not immune to the weekend declines. All chain scales recorded negative weekend RevPAR comps, with Luxury seeing the smallest decrease. Even when excluding West South Central region, all chain scales posted negative RevPAR comps for the weekend, and all but Luxury posted negative for the week.

What group there was, held

While the week was generally soft because of the Monday holiday, Group demand in Luxury and Upper Upscale hotels advanced Sunday through Thursday (+1.4%) before declining 3.5% on the weekend. As a result, group demand was down 0.5% for the week. As often happens, Transient demand reflected an opposite pattern with demand retreating Sunday through Thursday (-1.1%) with a small increase on the weekend (+0.4%), which resulted in a decrease of 0.6% for the entire week. Conference calendar shifts were evident across the Top 25 Markets with San Diego seeing the greatest group occupancy gain and New Orleans seeing the largest decrease. The annual NAFSA conference of international educators was hosted by New Orleans last year and took place in San Diego this year. 

Continued strong global performance, China a big exception

Global RevPAR, excluding the United States, advanced 6.6% as ADR rose 7.5% and, while occupancy declined 0.5ppts, demand was up 0.3%. The picture changes considerably when removing China from the mix. Excluding China, RevPAR increased to +9.8% with ADR up 8.4% and occupancy rising 0.9ppts. Most markets across China experienced RevPAR declines due to falling occupancy and ADR. Three consistently high performing markets are Sanya in the south and Liaoning and Jilin in the north.

Japan and Mexico continue to reign supreme with ADR and, at a slower pace, occupancy advancing RevPAR. Most of the top countries will see RevPAR gains for May despite the slower week last week. 

Aside from China, two other key countries, U.K. and Indonesia, saw RevPAR declines this week. In the U.K., London, drove the slowdown. All measures were down with ADR driving most of the week’s 7.2% retreat. 

Indonesia’s RevPAR decrease was driven by four of its largest markets. Jakarta 
(-15.4%) and East Java (-21.9%) had the largest impact on the country followed by Banten (-6.6%) & West Java (-1.5%). Occupancy was the exclusive driver of the declines in three of the four markets except in East Java where both ADR and occupancy dipped.

Looking ahead

The soft performance this past week reduced our overall May RevPAR estimate to +0.1% with May YTD RevPAR at +1.3%. A year ago, May YTD RevPAR was up 1.4%. 

Occupancy on the books is still looking strong for June and flat for July and August. The latter two months show an improvement from the previous week, which confirms the impact of shorter booking windows due to increased uncertainty. Some speculate that the later spring break delayed consumers from thinking about summer vacations, and that once summer is in full swing, bookings for July and August will improve. 

Global performance across much of the world appears unstoppable. China, and to a much lesser degree, the United Kingdom and Indonesia, will likely remain challenged.