Canada, Japan, and UK Lead Hotel Market Trends as United States Struggles with RevPAR Decline in 2025, Here is a New Report

As of 2025, Canada, Japan, and the U.K. have emerged as leaders in global hotel market trends, setting the pace for growth while the United States struggles with a notable decline in RevPAR (Revenue per Available Room). Despite challenges in the U.S. hospitality industry, these regions are experiencing remarkable resilience and continued growth in their hotel markets.

Canada, with its expanding hotel portfolio and growing demand for travel, has shown steady increases in RevPAR, particularly in major cities. Japan, bolstered by global events like EXPO 2025, has also witnessed strong RevPAR performance, especially in cities like Osaka. Meanwhile, the U.K. continues to benefit from a surge in tourism, with key markets like Manchester showing impressive growth in hotel revenue.

On the other hand, the United States has seen a dip in its RevPAR, driven by a mix of economic uncertainty, rising operating costs, and fluctuating demand across major markets. While some regions, like New York and Las Vegas, have experienced slight recoveries, the broader trend in the U.S. remains downwards.

This new report sheds light on how Canada, Japan, and the U.K. are outpacing the U.S. in hotel market performance in 2025, highlighting regional differences and key factors shaping these trends. As the global hospitality sector evolves, these nations have proven their ability to adapt and lead, contrasting sharply with the struggles faced by the U.S. hotel industry.

For the fourth consecutive week, the U.S. hotel industry is grappling with a decline in revenue per available room (RevPAR), a key industry metric. According to data for the week ending July 19, U.S. hotel RevPAR fell by 3.3% year-over-year, though it marked a slight improvement from the previous week’s 3.7% drop.

The primary driver of this downturn continues to be a drop in room demand, which saw a decline of 1.8%. Additionally, the average daily rate (ADR) also saw a 0.7% dip. While room supply grew by just 0.8%, occupancy levels dropped by nearly 2 percentage points to 71.6%, highlighting the challenges facing the industry despite summer’s peak travel period.

Metro markets, especially in top-tier cities, have been hit hardest. The Top 25 Markets and metro areas outside the Top 25 reported notable declines in RevPAR, with drops of 4.3% and 4.7%, respectively. A closer look at the data reveals that specific markets like Las Vegas, Houston, and Los Angeles have experienced significant setbacks.

Las Vegas, for example, saw its RevPAR fall by a staggering 17.1%, largely attributed to a drop in international arrivals, calendar shifts in group meetings, and economic challenges faced by middle- to lower-income households. Similarly, Houston’s performance was heavily impacted by last year’s Hurricane Beryl and the Derecho weather event. Meanwhile, Los Angeles, particularly in its central business district, experienced a steep drop in both demand and ADR, reflecting wider industry challenges in large metropolitan hubs.

Excluding these high-impact markets, RevPAR across the U.S. was still down, though by a lesser extent of 1.9%. Notably, ADR remained weak, showing little to no improvement, and was well below the rate of inflation.

Despite the ongoing struggles, the weekend performance showed signs of relative stability. Weekend RevPAR dropped by 2.5%, largely driven by the declines in Top 25 markets. On the other hand, markets outside the Top 25 experienced a less severe dip of 0.9%. Weekday and shoulder-day RevPAR dropped by more than 3%, primarily due to falling occupancy and flat-to-declining ADR, especially in the most prominent markets.

Despite overall market challenges, luxury hotels in the U.S. continue to show resilience. The luxury segment reported a 1.5% increase in RevPAR, driven by a 2.2% increase in ADR. Although occupancy in this segment was down, the increase in supply (up 5.3% YOY) indicates that demand for luxury accommodations remains strong, with fewer concerns about declining occupancy rates.

In stark contrast, the economy segment has faced considerable setbacks. Economy hotel RevPAR fell 7%, with both occupancy and ADR taking significant hits. This downturn in the economy sector marks a stark shift from the pandemic era when economy hotels saw considerable success, while luxury brands struggled.

While the U.S. hotel industry struggles, the global market is showing mixed signals. Global RevPAR, excluding the U.S., has increased by 0.5%, with growth primarily driven by ADR. However, occupancy globally fell by 1.3 percentage points, with the highest level of occupancy recorded this year at 72.2%. Japan and Canada stand out as bright spots in this uncertain global landscape.

Japan’s market, led by Osaka, continues to outperform, maintaining its position as the global leader in RevPAR growth. Osaka, in particular, has benefited significantly from EXPO 2025, and the city has posted the greatest gains in Japan, with continued growth seen across other Japanese markets.

Canada, too, has shown promising performance, with double-digit RevPAR growth in ten of its 22 markets. The country’s strong recovery has been fueled by both ADR and occupancy increases, reflecting a true surge in travel demand. The U.K. has similarly posted strong results, with markets like Manchester seeing a 25.8% increase in RevPAR, driven by the hosting of major events such as the 153rd Open Championship golf tournament.

Despite these regional successes, several markets in Europe and China have seen declines. Spain, although seeing overall growth, has experienced negative RevPAR in urban markets like Barcelona and Madrid, with increased competition and seasonality contributing to the challenges. Meanwhile, China’s RevPAR declined by 6.7%, with Beijing and Guangzhou, two of the top-tier cities, showing particularly steep declines.

The U.S. hotel industry is facing an uphill battle as 2025 progresses. Despite a booming travel season, key performance metrics like revenue per available room (RevPAR) and occupancy are showing concerning declines. For the week ending July 19, 2025, the U.S. hotel industry saw a 3.3% drop in RevPAR, continuing a trend of year-over-year declines. Although slight improvements were noted from previous weeks, the overall outlook remains bleak, primarily due to a combination of economic challenges, labor disputes, and shifts in consumer behavior.

While the U.S. hotel market’s struggles persist, other global regions such as Japan and Canada are experiencing growth. This dichotomy highlights the current volatility and uneven recovery of the global tourism sector.

For the week ending July 19, 2025, the U.S. hotel industry reported several worrying statistics:

These statistics point to a broader slowdown in the market. The decline in RevPAR, which is one of the most crucial metrics in the hotel industry, signals weaker demand and pricing power. While hotel room supply increased slightly by 0.8%, the low occupancy rate reflects the market’s struggle to attract and retain guests. Despite the summer peak travel season, U.S. hotels are finding it difficult to fill rooms at profitable rates.

The U.S. hotel industry’s stock performance in July 2025 reveals a complex landscape, with varying outcomes driven by economic factors, regional dynamics, and company-specific conditions. While some hotel chains and real estate investment trusts (REITs) have demonstrated resilience, others are navigating challenges that reflect broader market conditions. From global economic uncertainty to labor disputes and shifting consumer behavior, these factors are playing a critical role in shaping the future of U.S. hotel stocks.

Marriott International (MAR), one of the world’s largest hotel chains, has posted strong performance despite the broader market challenges. As of July 25, 2025, Marriott’s stock closed at $278.50, up 2.06% from the previous close. The stock saw an intraday high of $278.76, indicating investor confidence in the company’s financial health and growth prospects. Marriott’s strong stock performance reflects its ability to adapt to market conditions, expand its portfolio, and maintain steady demand for its services.

Marriott’s stock is also bolstered by its robust presence across global markets, positioning the company to weather fluctuations in regional demand. Marriott’s continued strategic expansion into emerging markets and its broad customer base have contributed to its strong market position, making it a leader in the U.S. hotel sector. The company’s focus on luxury and premium offerings has proven advantageous as affluent travelers continue to seek high-end accommodations despite economic challenges.

Hilton Worldwide Holdings Inc. (HLT) also delivered impressive results in July 2025, outperforming many of its competitors. Hilton’s stock closed at $273.83, marking a 2.34% increase. This outperformance in a mixed market environment speaks to Hilton’s strong brand presence and strategic market positioning. Despite slight dips in broader market performance, Hilton has managed to maintain investor confidence, thanks to its diverse portfolio and ongoing expansion.

Hilton has continued to capitalize on strong demand for its premium offerings and its growing presence in key international markets. As global travel rebounds, Hilton’s strong loyalty program and commitment to enhancing guest experiences have proven to be key drivers of growth. While the company faces challenges tied to broader economic factors, Hilton’s ability to navigate these headwinds positions it well for future stability.

Host Hotels & Resorts Inc. (HST), a leading hotel REIT, has displayed a stable performance in July 2025. The company’s stock closed at $16.64, reflecting a modest gain of 1.31%. This steady growth is indicative of the resilience of the REIT sector, particularly in the hotel industry. Despite mixed market conditions, Host Hotels has managed to maintain a solid footing, thanks to its diversified portfolio of high-quality properties in key markets.

The company’s performance reflects its ability to adapt to shifts in market demand and capitalize on long-term investments. As the hotel sector continues to recover, Host Hotels remains well-positioned to benefit from rising demand for both leisure and business travel. The REIT’s focus on prime locations and well-maintained assets has allowed it to outperform in comparison to other market players.

Several other hotel stocks have shown mixed results in July 2025, as varying factors have influenced their performance. Choice Hotels International, Inc. (CHH), for example, closed at $134.84, up 1.38%, demonstrating steady investor confidence. Choice Hotels, with its extensive franchise model, continues to perform well due to its affordable offerings catering to budget-conscious travelers, even in the face of economic uncertainties.

Meanwhile, Wyndham Hotels & Resorts Inc. (WH) saw a significant 3.14% increase in stock value, closing at $91.61. This positive performance reflects the growing demand for mid-tier accommodations as more travelers opt for value-driven options in light of economic pressures. Wyndham’s strategic focus on expanding its portfolio in international markets, particularly in regions with strong demand for budget-friendly stays, has contributed to its growth.

However, not all hotel stocks have been immune to the economic pressures facing the hospitality industry. RLJ Lodging Trust (RLJ) and Park Hotels & Resorts Inc. (PK) posted modest gains, with stock increases of 2.34% and 1.26%, respectively. While these increases reflect some resilience, they also underscore the challenges of operating in a competitive and uncertain environment.

PENN Entertainment Inc. (PENN) emerged as one of the standout performers in July 2025, with its stock price climbing 5.03% to $19.13. This impressive growth is reflective of the company’s focus on diversifying its operations, including its ventures into the gaming and entertainment sectors. The convergence of hospitality and entertainment has proven to be a successful strategy for PENN, as it leverages its casino operations to drive hotel demand and expand its market presence.

Similarly, Diamondrock Hospitality Co. (DRH) closed at $8.14, reflecting a 0.99% increase. While not as dramatic as PENN’s rise, Diamondrock’s performance highlights its ongoing efforts to maintain a steady presence in the hotel REIT sector. The company’s portfolio of properties in key U.S. markets continues to offer solid returns, and its emphasis on operational efficiency has allowed it to remain competitive.

In contrast to other hotel stocks, Ashford Hospitality Trust Inc. (AHT) has faced some setbacks, with its stock closing at $6.51, reflecting a slight decrease of 0.08%. This decline points to the broader challenges facing some hotel REITs, which are more vulnerable to fluctuations in hotel demand and occupancy. Ashford’s performance has been impacted by economic uncertainty, labor disputes, and challenges within the broader hospitality sector.

The downturn in the U.S. hotel industry is not uniform across the country. There are significant variations in performance between different regions and major cities.

Houston has faced the steepest declines in recent months. The city’s RevPAR plummeted by 38.3%, largely due to the disruption caused by Hurricane Beryl in 2024 and subsequent weather events. These factors displaced large numbers of travelers last year, and the effects have carried over into 2025, making comparisons to last year’s performance particularly difficult.

Additionally, Houston’s occupancy rate dropped by 27.6%, and ADR fell by 14.7%. These declines highlight the ongoing challenges faced by cities that were impacted by major natural disasters. The recovery process is expected to take several more years before the city can return to its previous levels of tourism demand.

Las Vegas, a city known for its vibrant tourism industry, has also been hit hard by the current downturn. RevPAR in the city fell by 17.1% in the past week, driven by a decline in international visitors and calendar shifts in large meetings and conventions. Additionally, economic factors affecting middle to lower-income households have dampened the demand for luxury experiences and extended stays, further impacting RevPAR.

The city’s hotels are also experiencing decreased occupancy, and while Las Vegas traditionally benefits from a bustling nightlife and tourist economy, its reliance on international visitors has made it particularly vulnerable to shifts in global travel patterns.

While many U.S. cities are grappling with declining performance, New York City remains a relative stronghold. With an occupancy rate of 88.5% in June 2025, New York continues to attract significant numbers of both leisure and business travelers. The city’s status as a global tourism hub, combined with its diverse hotel offerings, has allowed it to maintain strong demand despite broader market challenges.

However, even New York has faced minor declines in RevPAR as the city battles rising operating costs and ongoing labor negotiations. Nonetheless, it remains one of the top-performing markets in the U.S.

Several factors are influencing the U.S. hotel industry’s performance in 2025. Chief among these is consumer behavior, which has become more cautious due to economic uncertainties. The ongoing inflationary pressures, coupled with a weaker U.S. dollar, have led many American travelers to adopt a more conservative approach to spending.

Travelers are increasingly seeking deals, delaying trips, or opting for more affordable accommodations, contributing to the overall dip in demand for hotel rooms. This trend is reflected in the hotel industry’s struggle to maintain high occupancy and ADR levels, even during the peak summer travel season.

Additionally, labor disputes in key cities, such as Boston and San Francisco, have affected hotel operations. In Boston, workers at several Hilton properties went on strike in October 2024, demanding better wages and working conditions. Similarly, hotel workers in San Francisco were on strike in December 2024, disrupting operations and affecting guest experiences. These labor disputes have only added to the strain on the U.S. hotel industry, further complicating efforts to maintain service levels and profitability.

While the U.S. hotel industry struggles, international markets such as Japan and Canada are seeing significant growth. Japan has emerged as a top performer, with Osaka leading the charge due to the ongoing EXPO 2025. Osaka’s RevPAR has consistently shown gains, with the city posting some of the highest growth in the country. Japanese hotels have benefitted from rising demand, and despite some declines in occupancy, ADR continues to rise.

Canada has also been a bright spot in the global hotel market. The country saw double-digit RevPAR increases in ten of its 22 markets, fueled by both ADR and occupancy gains. The growth is a clear indication that Canada’s tourism sector is recovering strongly from the pandemic’s impact, making it one of the most resilient hotel markets in North America.

The U.K. has likewise reported strong performance, with RevPAR rising across several key markets. Notably, Manchester experienced a 25.8% increase in RevPAR, driven by events like the 153rd Open Championship. These positive results in key international markets underscore the resilience of global tourism, even as U.S. hotels face economic headwinds.

The outlook for the U.S. hotel industry for the remainder of 2025 remains uncertain. While some regions are showing signs of recovery, national performance is being held back by a combination of declining demand, economic pressures, and labor-related disruptions. The second half of the year may offer some relief, with forecasts indicating a modest recovery in RevPAR. The hotel industry’s ability to adapt to changing consumer behavior, economic shifts, and labor challenges will be critical to navigating the remainder of 2025.

Industry experts, such as those at CBRE and PwC, remain cautiously optimistic. CBRE projects a 1.3% increase in RevPAR for 2025, driven by improving macroeconomic conditions. Meanwhile, PwC anticipates RevPAR growth of 1.1% in Q3 and 1.8% in Q4. These projections suggest that while the U.S. hotel industry faces hurdles, there is room for a gradual recovery in the coming months.

As the U.S. hotel industry continues to grapple with various challenges in 2025, regions like New York, Las Vegas, and Houston will need to focus on adjusting to shifting consumer expectations and economic realities. Global markets such as Japan and Canada offer valuable lessons in resilience, and U.S. hotels must take note of these successes in order to better position themselves for the remainder of the year. By adapting to market conditions, embracing innovation, and addressing labor and operational challenges, the U.S. hotel industry can still navigate the uncertainties of 2025 and emerge stronger in the years to come.

The ongoing challenges faced by major U.S. cities—especially those impacted by natural disasters, economic pressures, and sociopolitical factors—will require a nuanced approach to interpreting year-over-year performance. Factors such as the effects of Hurricane Helene in September and Hurricane Milton in October will create tough comparisons, making it essential to monitor these trends as 2025 progresses.

Global Resilience Amid Challenges: A Call for Adaptation

While the U.S. hotel market faces its toughest summer in years, global markets like Japan and Canada offer hope. The divergence in performance highlights the global travel industry’s evolving dynamics, with different regions recovering at varying speeds. Hotel operators, airlines, and travel industry professionals must remain agile, adjusting to shifting consumer behaviors, economic pressures, and geopolitical shifts. For those invested in tourism, the key to navigating these uncertain times lies in adaptability, innovation, and a commitment to meeting changing traveler expectations.

As the global tourism industry continues to evolve, players across the sector must seize opportunities where they arise. The future may hold a mixed bag of challenges and triumphs, but the market is undeniably resilient.