All financial figures in U.S. dollar constant currency.
Highlights
- Anemic U.S. RevPAR expected to continue through the end of summer
- Negative weekdays in the Top 25 Markets reflect stalled business travel
- Economy hotels causing demand decline, exacerbated by Houston
- Canada posted 10th straight week of RevPAR growth
Another week of lackluster RevPAR as the end of summer nears
U.S. hotel revenue per available room (RevPAR) fell 0.5% for the week ending 16 August with significant influence from the difficult year-over-year comps in Houston. Houston, which accounted for 5 basis points of the national RevPAR decrease, was not alone as 47% of all markets saw RevPAR decline by more than half a percentage point—the most of the past four weeks. Falling occupancy drove the nationwide RevPAR decline, while average daily rate (ADR) rose a mere 0.4%.
— Source: STR
Top 25 Market slowdown reflects stalled business travel
Slowing weekday occupancy, particularly in the Top 25 Markets (T25) had the largest impact on the week. Business travel, which is best represented in weekday performance, has plateaued. Leisure travel continued, as evidenced by strong weekend performance, however, it was not enough to carry the industry.
Weekday occupancy declined 0.7ppts with ADR up only 0.3%, reducing RevPAR by 0.9%. Weekend RevPAR advanced 0.3% on ADR (+0.6%) as occupancy dipped 0.2ppts. Notable differences appeared across the Top 25 Markets compared to all other markets. Weekday RevPAR in the T25 Markets fell 2.3%, and weekend RevPAR fell 1.3% with occupancy the primary culprit. Overall, T25 weekly RevPAR dropped 2%. Excluding Houston, weekly RevPAR was down 0.9% overall with negative weekday comps (-1.3%) and a flat weekend.
RevPAR was somewhat better in other non-T25 metro areas with weekday and weekend RevPAR up 0.2% and 0.3%, respectively. For the week, non-T25 advanced 0.2%. Non-metro/rural areas posted the largest weekly gain (+0.7%) with the weekend advancing 1.9% and weekdays flat.
— Source: STR 
— Source: STR 
— Source: STR
Summer’s end is nearing
This has been the weakest summer of the past four years, and we only have two more weeks left of the 2025 summer travel season. Demand is down 1.4 million room nights compared to the same period last year. RevPAR has declined 1.1% on occupancy with ADR up just 0.2%. The demand retreat has come mostly from Economy hotels, with 45% of its decline centered in 10 markets (in order), including: Houston, Las Vegas, Los Angeles, Arkansas Area, Texas South, Myrtle Beach, and New Jersey Shore. Houston and Las Vegas account for nearly a quarter of the Economy hotel decrease. Midscale and Upper Upscale class hotels have also seen a decline over the summer, but to a lesser extent and only make up 20% combined of the total room nights lost this summer. Luxury, Upscale, and Upper Midscale have all gained about the same number of room nights this summer (~438,000 each), but their combined growth was insufficient to offset the decreases from the other classes.
Top 25 down over the past four weeks
Top 25 Market performance has been suffering for much of the summer, and the most recent week was no exception. Of the 16 markets seeing RevPAR decline, all but Tampa have seen RevPAR decrease over the past four weeks. Excluding Houston and Las Vegas, the remaining Top 25 Markets in total remained in arrears over the past four weeks due to declining occupancy and a barely positive ADR comp.
- Houston’s weekly RevPAR dropped 27.1% due to the difficult 2024 storm-elevated comps. One bright spot for Houston was positive Group demand, which advanced 24.6% with Group ADR rising 34.0%.The market’s central business district (CBD) was the primary beneficiary while the rest of Houston’s submarkets declined. Over the past four weeks, RevPAR for the entire Houston market is down 28.2% on retreating occupancy.
- New Orleans also has difficult 2024 comps. Last year, it was among the top five performing markets nationwide during this period. RevPAR over the past four weeks is down 14.5% on occupancy.
- Las Vegas, which has seen persistent decreases, was still down, but to a lesser extent. Over the past four weeks, RevPAR declined 5.2%.
— Source: STR 
— Source: STR
Bifurcation holds with Economy hotels impacted the most
Luxury hotels posted healthy gains even as the rest of the industry slows. Luxury RevPAR rose 4.4%, from a combination of ADR (+2.9%) and occupancy +0.9ppts. Upper Upscale posted a flat RevPAR comp as ADR gains were offset by occupancy declines due increasing supply. Persistent supply gains have also impacted occupancy in Upscale and Upper Midscale along with falling ADR. Midscale, which saw supply outstrip demand gains too, had a larger ADR decline. Weekly RevPAR for the three ranged from -1.3% in Upscale to -2.3% in Midscale. Economy fell 4.3% due to a sharp ADR decrease (-3.1%) along with falling occupancy. As noted already, Houston is having an impact, and it is felt particularly in Economy hotels. Excluding Houston, Economy performance is still down, however much less severe at -2.1% with ADR having the largest impact (-2%).
— Source: STR
Unstoppable Canada
Global RevPAR, excluding the U.S., increased 4.2%, lifted by ADR (+2.4%) and occupancy rising 1.3ppts. Six of the top 10 countries advanced, led by Japan and Canada. These two countries have held the top two spots for the past four weeks. Canada has reported solid performance all summer and has seen RevPAR growth for the past 10 weeks, with the measure increasing 8.3% in the most recent period. Since the start of Summer, Canadian RevPAR has increased 7.7%
- China saw positive a RevPAR comp (+1.3%) for the first time since mid-May. The week’s gain was a function of both ADR (+0.6%) and occupancy (+0.6ppts).
- U.K. RevPAR slowed (-2.2%), partly due to a Taylor Swift comp last year.
- Germany and France continued to face tough sports comps (EURO, Olympics) from last year, causing RevPAR declines 11.8% and 30.0%, respectively, both on falling ADR.
— Source: STR
Looking ahead
The next couple of weeks through Labor Day are expected to see more of the same. With schools in session across much of the country, leisure travel will continue to slow, and business travel is unlikely to fill in the gap during the fortnight. The impact of Hurricane Erin will be seen in next week’s results along with continued headwinds from Houston’s storm comps. Chicago will see a slowdown impacted by the comp to the 2024 Democratic Convention. Difficult comps from Hurricane Helene and Milton are also on the horizon.
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 future media events will not sustain an increase in future occupancy rates. 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.
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