WASHINGTON – 2 June 2025 – CoStar and Tourism Economics downgraded growth projections in a revised 2025-26 U.S. hotel forecast just released at the NYU International Hospitality Investment Forum.
Given Q1 underperformance and elevated macroeconomic concerns, forecasted growth rates were lowered across the top-line metrics: supply (-0.1 ppts), demand (-0.6 ppts), ADR (-0.3 ppts) and RevPAR (-0.8 ppts).
Similar adjustments were made for 2026: supply (-0.5 ppts), demand (-0.3 ppts), ADR (-0.7 ppts) and RevPAR (-0.6 ppts).
“Top-line performance is still growing even in the current environment,” said Amanda Hite, STR president. “Until consumer confidence improves, however, demand is going to remain softer—especially in the middle and lower price tiers. Rate is pushing the top line in the group segment, and business transient should continue to recover in a lot of industries, but leisure gains are going to be more isolated. Our forward-looking data continues to support the observations of many industry stakeholders that booking windows have shortened. That adds to the challenges hoteliers will face in the coming quarters.”
“We’re looking ahead to a second half of the year with consumers facing higher prices and a weaker labor market, businesses tapping the brakes on investment, and soft international visitor volumes,” said Aran Ryan, director of industry studies at Tourism Economics. "While recession risks have eased, the economy—and the travel sector—will walk on a tight rope through this period."
The projection for gross operating profit per available room (GOPPAR) was also lowered $3 for 2025.
“While GOP growth will continue, the pace will be modest due to softer demand, rising departmental costs, and limited margin gains from ancillary revenues,” Hite said. “When adjusted for inflation, GOP is down from last year.”
For more information about the company and its products and services, please visit costargroup.com.
News Media Contacts
Haley Luther
Senior Communications Manager
(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 global leader in commercial real estate information, analytics, online marketplaces and 3D digital twin technology. Founded in 1986, CoStar Group is dedicated to digitizing the world’s real estate, empowering all people to discover properties, insights, and connections that improve their businesses and lives.
CoStar Group’s major brands include CoStar, a leading global provider of commercial real estate data, analytics, and news; LoopNet, the most trafficked commercial real estate marketplace; Apartments.com, the leading platform for apartment rentals; and Homes.com, the fastest-growing residential real estate marketplace. CoStar Group’s industry-leading brands also include Matterport, a leading spatial data company whose platform turns buildings into data to make every space more valuable and accessible, STR, a global leader in hospitality data and benchmarking, Ten-X, an online platform for commercial real estate auctions and negotiated bids and OnTheMarket, a leading residential property portal in the United Kingdom.
CoStar Group’s websites attracted over 130 million average monthly unique visitors in the first quarter of 2025, serving clients around the world. Headquartered in Arlington, Virginia, CoStar Group is committed to transforming the real estate industry through innovative technology and comprehensive market intelligence. From time to time, we plan to utilize our corporate website 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.