For an industry that has spent five years insisting the worst was behind it, America’s hotel sector has finally met an unwelcome old friend: gravity.

Fresh figures from CoStar reveal that 2025 delivered the first full-year decline in both occupancy and revenue per available room since the dark days of 2020, a sobering milestone for a market long buoyed by post-pandemic revenge travel and resilient corporate demand.

National occupancy slipped to 62.3 per cent, down 1.2 per cent on 2024. Revenue per available room edged backwards by 0.3 per cent to US$100.02. Only the average daily rate offered a glimmer of cheer, inching up 0.9 per cent to US$160.54.

In plain English: Americans are paying a little more per night, but fewer of them are checking in.

Yet, as ever in hospitality, the devil is in the details.

New York City continues to behave like a market from another planet. With occupancy at an eye-watering 84.1 per cent and nightly rates averaging US$333.71, Manhattan remains the nation’s undisputed revenue champion. RevPAR climbed to US$280.71, up 4.5 per cent – proof that Broadway, Wall Street and foreign tourists still make a potent cocktail.

At the other end of the performance ledger sits Houston, where occupancy tumbled 8.6 per cent to 58.9 per cent. Energy markets may hum, but hotel lobbies were conspicuously quieter.

San Francisco, however, staged the year’s quiet comeback. Rates jumped 6 per cent, and RevPAR surged 11.8 per cent, suggesting the long-lamented recovery of convention traffic and international visitors may finally be gathering pace.

Then there is Las Vegas – a city built on odds, now confronting some unfriendly ones. ADR fell 4.3 per cent, while RevPAR slid a sharp 10.9 per cent. When even the Strip is discounting, you know the cycle is turning.

For Australian investors, operators and brand strategists watching from afar, the message is clear: the US market is normalising. The sugar hit of post-pandemic demand has faded, replaced by selective travel, value sensitivity and sharper competition.

As CoStar notes, this is not a collapse, merely a recalibration. But after half a decade of recovery headlines, 2025 marks a psychological shift: the recovery phase is officially over.

Now comes the harder work of growing again.

For more details, see CoStar Group’s full market analysis at https://www.costargroup.com.

by Jason Smith – (c) 2026.

Read Time: 2 minutes.

About the Writer.

Jason Smith has the kind of story you can’t fake, built on long flights, new cities, and that unmistakable hum of hotel life that gets under your skin and never quite leaves. Half American, half Asian, he grew up surrounded by the steady rhythm of the tourism trade in the U.S., where his family helped others see the world long before he did.

Eager to carve out his own path, Jason packed his bags for Bangkok and the Asian Institute of Hospitality & Management, where he majored in Hotel Management and found a career and a calling. From there came years on the road, Singapore, Malaysia, Vietnam, each stop adding another thread to his craft.

He made his mark in Thailand, eventually becoming Director of Sales for one of the country’s leading hotel chains. Then came COVID-19: borders closed, flights grounded, and a new chapter began.

Back home in America, Jason turned his knack for connection into words, joining Global Travel Media to tell the stories behind the check-ins written with the same warmth and honesty that have always defined him.

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