WASHINGTON – 28 January 2025 – CoStar and Tourism Economics made minimal adjustments to growth projections in the first U.S. hotel forecast of 2025 just released at the Americas Lodging Investment Summit (ALIS).
For 2025, projected gains in average daily rate (ADR) and revenue per available room (RevPAR) were unchanged from the previous forecast, +1.6% and +1.8%, respectively. Occupancy for the year was raised 0.1 ppts to 63.1%.
“While business optimism is on the rise, economic data has not changed significantly from our previous forecast,” said Amanda Hite, STR president. “The stronger performance seen in Q4 was driven by one-time factors, including holiday travel compression and weather-related events, and does not constitute a change in trend. Additionally, the impact of the new administration has not been factored into the forecast, as significant policy changes have yet to be implemented, and any projected effect of those changes remains unclear. Thus, our forecast is relatively unchanged overall with minor tweaks among the chain scales. Based on current economic conditions, we expect higher-end hotels to continue to drive industry performance.”
"Economic conditions in 2025 are expected to provide a favorable backdrop for travel activity. Unemployment is low, inflation is slowing, consumers are spending - particularly those in higher income households, and business investment activity is solid," said Aran Ryan, director of industry studies at Tourism Economics. "Trump Administration trade and immigration policy priorities present downside risks, particularly to inbound travel (e.g., through trade war responses, visa impediments, charged rhetoric, and general border and policy uncertainty)."
“Normalized expense growth and a slight increase in TRevPAR is expected to help drive profits in 2025,” said Hite. “Labor costs are forecasted to stabilize in 2025 as hotels have adjusted operations to current labor trends, and these lower labor margins will allow for slightly better GOP margins. With continued growth in groups and business travel, F&B departments are expected to report some of the highest growth rates this year. Rooms and undistributed operating expense growth will moderate, though utilities departments will almost certainly see increases.”
For more information about the company and its products and services, please visit costargroup.com.
News Media Contacts
Haley Luther
Senior Communications Manager – STR
(216) 278-0627
hluther@str.com
Aran Ryan
Director, Lodging Analytics
aran.ryan@oxfordeconomics.com
+1 610 995 9600
ABOUT COSTAR GROUP, INC.
CoStar Group (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics in the property markets. Founded in 1987, CoStar Group conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of real estate information. CoStar is the global leader in commercial real estate information, analytics, and news, enabling clients to analyze, interpret and gain unmatched insight on property values, market conditions and availabilities. Apartments.com is the leading online marketplace for renters seeking great apartment homes, providing property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked online commercial real estate marketplace with thirteen million average monthly global unique visitors. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X offers a leading platform for conducting commercial real estate online auctions and negotiated bids. Homes.com is the fastest growing online residential marketplace that connects agents, buyers, and sellers. OnTheMarket is a leading residential property portal in the United Kingdom. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. Business Immo is France’s leading commercial real estate news service. Thomas Daily is Germany’s largest online data pool in the real estate industry. Belbex is the premier source of commercial space available to let and for sale in Spain. CoStar Group’s websites attracted over 163 million average monthly unique visitors in the third quarter of 2024. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time, we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.
This news release includes "forward-looking statements" including, without limitation, statements regarding CoStar's expectations or beliefs regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that forecasted consumer spending and general economic conditions do not result in growth in travel activity, business investment, and demand. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar’s filings from time to time with the Securities and Exchange Commission, including in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2023 and Forms 10-Q for the quarterly periods ended March 31, 2024, June 30, 2024, and September 30, 2023, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar’s other filings with the SEC available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Tourism Economics
Tourism Economics, an Oxford Economics company, focuses on the intersection of the economy and travel sector, providing actionable insights to our clients. We provide our worldwide client base with direct access to the most comprehensive set of historic and forecast travel data available. And our team of specialist economists develops custom economic impact studies, policy analysis, and forecast models.
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