Citing what it called “a substantially reduced economic outlook,” Lodging Analytics Research & Consulting this week “considerably” reduced its U.S. hotel performance outlook from its prior forecast in June.
LARC now projects full-year 2025 U.S. hotel occupancy to decline 1.6 percent year over year, compared with a projected 0.8 percent decline in the June forecast. LARC projects the 2025 U.S. average daily rate to increase 0.8 percent from 2024 levels (compared with 2.1 percent in June) and revenue per available room to decline 0.7 percent (compared with a projected 1.3 percent increase in June).
LARC president and co-founder Ryan Meliker in a letter to clients cited an uncertain macroeconomic outlook and slowing U.S. job growth for the pared-down forecast.
Meliker noted second-quarter U.S. RevPAR declined 0.5 percent year over year even as U.S. gross domestic product increased 3 percent, concluding that “the strength of the underlying economy may be far more modest than the 2Q GDP print implies. For example, when excluding a tariff-induced net trade imbalance, Real GDP declined roughly 2 percent in the quarter.”
Additionally, Meliker in the letter wrote that “job growth has been declining since May 2025, apart from the healthcare sector,” adding that a stronger corporate embrace of artificial intelligence could limit job growth.
Still, “sluggish job growth may not have the same negative implications [for corporate travel] as it does for leisure demand,” Meliker wrote. “Entry-level roles are less likely to be corporate travelers and are the jobs most at risk from technological advancement. From a group perspective, trends continue to be holding despite the soft jobs data.”
LARC’s June forecast
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