🚨 For the week ending September 6, U.S. hotel RevPAR fell 0.7% year over year, driven by ~1 pp lower occupancy and a 0.2% YoY ADR dip. Luxury continued to outpace lower tiers, cushioning blended declines, while Top-25 markets dragged national comps. Financing remains bifurcated: strong assets defend pricing; weaker select-service face tighter proceeds and costlier debt.
RevPAR (U.S., w/e Sep 6): −0.7% YoY; occupancy ~−1 pp; ADR −0.2% YoY
Top 25 vs Other Markets RevPAR (w/e Sep 6): −1.5% YoY vs −0.1% YoY
Weekday RevPAR by class (Labor Day week): Luxury ~+4.0% YoY; Economy ~−3.9% YoY
CMBS hotel delinquency (Aug): ~6.5%, −5 bps MoM
Loan Performance. Flat/negative RevPAR pressures DSCR on transitional/economy assets; luxury/upper-upscale can still carry debt if ADR holds. Expect extensions over refinances where capex is pending; rate caps less relevant in fixed-rate take-outs but matter on bridge/SOFR floaters.
Demand Dynamics. Business transient is uneven; Top-25 underperform on int’l and calendar noise, while secondary/drive-to markets are near flat. Economy assets show occupancy-led declines; luxury sustains weekday mix via affluent/bleisure spend.
Asset Strategies. Prioritize downtime reduction (crew/contract blocks mid-week), tie TI/LC to firmed group pace, and re-stripe OPEX (labor scheduling, floor stacking). Sequence capex toward rooms and curb appeal where rate defense is plausible; defer low-ROI amenities.
Capital Markets. Term sheets remain conservative: 50–60% LTV, ~+300 bps over SOFR on bridge; life co debt selective for coastal trophies. CMBS appetite favors durable flags and markets with event calendars; weaker assets push to local banks/SBA or require fresh equity.
Rates stable, growth soft: revenue flat to slightly negative in many comps.
Favor higher-tier flags and event-driven submarkets; avoid rent-beta economy nodes.
Financing: underwrite lower proceeds, test refi DSCR with zero ADR growth.
Spreads/structure: wider on transitional; expect cash traps, FF&E escrows, and burn-off covenants.
🛠 Operator’s Lens
Refi. Lock prepay-flex terms; size on TTM with zero-growth case; ensure cap/extension coverage through maturity on floaters.
Value-Add. Tie capex to signed leases and group pace; 10–15% contingency on economy/midscale refreshes.
Development. Sensitize pro formas to flat RevPAR and +50–75 bps cap-on-cost; align GC/FF&E to shoulder-season openings.
Lender POV. Banks/CMBS price tighter for luxury/upper-upscale in stable markets; economy/select-service face DSCR haircuts, cash sweeps, and lower day-one IO.
Calendar inflection: “clean” mid-September comps may lift prints; late-September holidays likely mute weekday demand.
Market confirmation: Watch Top-25 vs ex-Top-25 gap and class splits to validate bifurcation.
Risk: Prolonged flat ADR into Q4 widens refi gaps for economy/select-service; delinquency stabilization could reverse.
September 15, 2025. CoStar/STR; MBA Newslink.
Weekly U.S. RevPAR YoY — STR Same-Store Series
