STR: Summer 2025 was tracking as weakest in four years

U.S. hotels sold 1.4 million fewer room nights in summer 2025 than in summer 2024. That is the figure STR, the CoStar Group benchmarking unit, put on the season in a weekly performance report by Isaac Collazo and Chris Klauda published Aug. 22, 2025, with two weeks of the travel season still to run. STR called it the weakest summer of the past four years.

A year on, that season is the yardstick. Hotel Dive's Jenna Graber reported in May 2026 that hotel companies posted widespread U.S. RevPAR growth in the first quarter of 2026 after what she described as a rocky 2025. For anyone reading a 2026 year-over-year gain at a top 25 market hotel, it is worth knowing exactly how soft the base underneath it was, and where.

Weekdays did the damage

National RevPAR fell 0.5% in the week ending Aug. 16, 2025, according to STR. Occupancy declines drove the drop; average daily rate rose only 0.4%. Houston's tough comparison against storm-related demand in 2024 explained 5 basis points of that national decline, but STR noted that 47% of all U.S. markets saw RevPAR fall by more than half a point that week, the most in four weeks.

The split between weekday and weekend is the part a revenue manager should keep. Weekday occupancy dropped 0.7 percentage points with ADR up 0.3%, pulling weekday RevPAR down 0.9%. Weekend RevPAR rose 0.3% on a 0.6% rate gain, per STR.

STR's reading was that business travel, best measured by weekday performance, had plateaued. Leisure kept the weekends afloat. It could not carry the weekdays.

The pattern sharpened in the top 25 markets. Weekday RevPAR there fell 2.3% and weekend RevPAR fell 1.3%, both on occupancy, for a full-week decline of 2%, STR reported. Strip out Houston and the top 25 were still down 0.9% for the week, with weekdays off 1.3% and the weekend flat.

Outside the big cities it was a different summer. Other metro markets grew RevPAR 0.2% for the week, and non-metro and rural areas posted the largest gain at 0.7%, with a 1.9% weekend jump and weekdays up 0.1%, according to STR. For an operator whose portfolio leans on corporate weekday business in gateway cities, the gap between a 2% weekly decline in the top 25 markets and a 0.7% gain in non-metro and rural areas is the benchmark to hold 2026 results against, not the national 0.5%.

Economy hotels and ten markets carried most of the loss

STR's season-to-date tally showed RevPAR down 1.1% for summer 2025, with occupancy falling and ADR up just 0.2%. The demand retreat came mostly from economy hotels, and it was geographically lopsided: 45% of the economy decline sat in 10 markets, among them Houston, Las Vegas, Los Angeles, the Arkansas Area, Texas South, Myrtle Beach and the New Jersey Shore. Houston and Las Vegas alone made up nearly a quarter of the economy decrease.

Midscale and upper-upscale hotels also lost room nights over the summer, but together they were only 20% of the total lost, per STR. Luxury, upscale and upper-midscale hotels gained. The summer was not a broad retreat so much as a thinning at the price-sensitive end in a handful of markets, while higher tiers held or grew.

The rate numbers fit an old finding. A 2021 paper in the Journal of Revenue and Pricing Management, using Dubai hotel data, argued that travelers become more price-sensitive in low-demand periods, so pushing rates in a soft season sends guests to competitors. ADR growth of 0.2% across a whole summer suggests U.S. operators mostly declined to test that limit in 2025.

For an economy-tier owner in one of those 10 markets, the implication is that 2026 comparisons will look flattering against a depressed 2025 base, and a modest gain may say more about the base than about the market. For a luxury or upscale operator, the reverse could apply.

The warning signs were visible in June

The August report did not come out of nowhere. A CoStar/STR performance update published on Hospitality Net on June 26, 2025, described data for June 8-14 as weaker than projected, with a third straight week of demand declines just as early-summer travel was supposed to lift results.

Markets losing room demand gave up 1,588,000 room nights in June month to date, offset by 552,000 gained elsewhere, for a net loss of 1,036,000, according to CoStar. Houston and Las Vegas together accounted for 32% of the absolute decline among markets that lost demand. CoStar attributed Houston to tough comparisons against Texas's May 2024 derecho and Las Vegas to a steep drop in international arrivals as of May.

It was not universally dark. Sixty-one of 172 U.S. markets were gaining June demand, led by Chicago, Nashville, Oklahoma Area, Orlando and Saint Louis, which together made up 32% of the growth among gaining markets, per CoStar.

Two details from that June update deserve a revenue manager's attention more than the headline numbers. First, CoStar flagged noticeable gaps between occupancy on the books and occupancy actually realized in Las Vegas, Houston, Philadelphia and Orlando for the week ending June 14, and offered group room blocks not filling as expected, especially with international travelers, as one possible reason. Second, U.S. group demand had dipped year over year for three consecutive weeks, which CoStar said was too short a run to call a trend but would warrant a rethink of the demand outlook if it persisted, given how resilient group had been in prior years.

CoStar also sized the international exposure. International arrivals were down 3.1% over the first five months of 2025 while 3% more Americans traveled abroad, and inbound visitors account for an estimated 4% to 7% of U.S. hotel demand against more than a billion room nights sold annually. Small nationally, but the June data indicate the exposure was concentrated in specific gateway markets rather than spread thin.

Supply, by contrast, was not the problem. Month-to-date supply growth of 0.8% in June 2025 was the highest since July 2022, with Nashville, New York City, Orlando, San Diego and Washington, D.C. adding 22% of the new rooms, but CoStar said supply was not adding significant pressure on performance and was unlikely to for some time.

Where 2026 stands against that base

Hotel Dive's first-quarter 2026 review found the fundamentals moving the other way. Marriott International and IHG Hotels & Resorts reported improvement across leisure, business and group travel, Hilton and others credited higher spending from middle- and lower-income households, and luxury kept outperforming for Marriott and Hyatt, according to Graber's reporting on the earnings calls.

Las Vegas is the sharpest reversal. Hotel Dive reported that operators there saw the RevPAR environment strengthen in Q1 2026 after the market logged the largest full-year ADR and RevPAR declines among top U.S. markets in 2025. STR reported that Houston and Las Vegas together accounted for nearly a quarter of the economy hotel decrease in summer 2025, so a Las Vegas gain in 2026 is partly a base effect and partly a real recovery, and the sources do not say how much of each.

The other 2026 variable is the FIFA World Cup. Hotel Dive reported that hotel CEOs were optimistic about a lift from the tournament this summer, while also noting that U.S. hotel bookings for the event were tracking below initial forecasts as of spring. Event demand is real but uneven: a study in the journal Tourism Economics of Taylor Swift's 2023 Eras Tour across 30 U.S. markets found concert dates lifted revenue per room sold by about 45%, with the gain rising with hotel quality and running higher on weekends. That is the shape of an event bump: concentrated in dates and in the upper tiers, which is not where 2025's losses were.

There is a longer thread here. Hotel Business reported in January 2022 that STR president and CEO Amanda Hite expected business and group travel to return more slowly than leisure coming out of the pandemic, with demand and nominal rates nearing full recovery that year. Three summers later, STR's own weekly read described business travel as plateaued rather than fully recovered. Hotel Dive's Q1 2026 reporting of business-segment improvement at Marriott and IHG is the first sign in this set of sources that the weekday line may be moving again.

The rest of the Q1 story was about growth and tools. Conversions drove most system expansion, per Hotel Dive, and Marriott and IHG promoted new AI-powered conversational search. After the quarter closed, Wyndham Hotels & Resorts launched a native ChatGPT app for conversational search and Choice Hotels announced work with AWS.

The test for 2026 is narrow and specific. If STR's weekly reports for late summer 2026 show top 25 market weekday RevPAR positive against a 2025 base that was down 2.3% in mid-August, business travel has moved off the plateau. If the gain shows up only on weekends and only in the upper tiers, the summer of 2025 will have been a floor, not a turning point.