What's Happening?
The U.S. hotel industry experienced a continued decline in performance in September 2025, marking the seventh consecutive month of reduced occupancy rates. According to CoStar, the overall hotel occupancy in the U.S. dropped
to 63.4%, a decrease of 1.9% compared to September 2024. The average daily rate (ADR) for hotel rooms slightly decreased by 0.1% to $162.69, while revenue per available room (RevPAR) fell by 2.1% to $103.19. Despite these challenges, New York City maintained the highest occupancy level at 86.6%, driven by major events such as Fashion Week and the UN General Assembly. In contrast, cities like New Orleans and Houston reported lower occupancy rates.
Why It's Important?
The ongoing decline in U.S. hotel occupancy rates highlights the challenges faced by the hospitality industry in maintaining pre-pandemic performance levels. The decrease in key performance metrics such as ADR and RevPAR indicates financial pressures on hotel operators, potentially leading to cost-cutting measures or changes in pricing strategies. The disparity in occupancy rates between major markets like New York City and smaller cities underscores the uneven recovery across the industry. This trend may influence investment decisions and development plans, as operators focus on markets with higher demand and event-driven traffic.