🚨U.S. hotel RevPAR slipped –1.4% YoY for the week ending September 20, 2025, marking one of 100 down days since May. Occupancy declined –0.7 points YoY, while ADR was nearly flat (–0.3%), underscoring that fewer room nights, not pricing, are driving weakness. Major markets saw steeper declines (–2.8% RevPAR), while secondary markets held flat. For CRE investors and lenders, the shift signals thinner NOI growth trajectories, tightening refinance margins and cautioning against aggressive underwriting.
RevPAR: –1.4% YoY, week ending Sept. 20, 2025 — [Source: STR].
Occupancy: –0.7 percentage points YoY, mid-60% range — [Source: STR].
ADR: –0.3% YoY, essentially flat — [Source: STR].
Top 25 Markets RevPAR: –2.8% YoY vs. flat in secondary markets — [Source: STR].
Loan Performance. NOI drag from flat/negative RevPAR reduces DSCR headroom, especially for 2026 maturities. Borrowers relying on rate-led growth face stress; caps offer little relief if topline stalls.
Demand Dynamics. Occupancy softness, particularly in urban weekday and weekend leisure segments, erodes absorption. Luxury holds steady; economy assets lag, signaling bifurcation in tenant/customer base.
Asset Strategies. Repositioning assets must target occupancy gains, not just rate. Underwriting should budget for targeted TI/LC and marketing spend to recapture share.
Capital Markets. CMBS underwriting turns conservative with flat-to-down RevPAR. Term sheets now assume stabilized NOI plateaus; spreads widen for economy/urban segments.
RevPAR momentum has plateaued.
Luxury assets resilient; economy under stress.
Financing requires conservative growth assumptions.
Secondary markets show relative stability vs. urban cores.
🛠 Operator’s Lens
Refi. Stabilized assets should lock flexible terms now; assume minimal NOI growth.
Value-Add. Focus on occupancy ramp, with contingency reserves for weak comps.
Development. Pro formas should stress-test RevPAR at flat or –2% YoY.
Lender POV. Expect tougher underwriting for large urban hotels; secondary markets may still clear at modest spreads.
STR signals that “coming weeks don’t look easier,” suggesting RevPAR will remain flat-to-negative into fall. Key variables: corporate 2026 travel budgets and inbound international travel recovery. CMBS pricing and cap rates will hinge on whether RevPAR stabilizes near zero or continues trending down.
STR — “Weekly Insights: Occupancy Pulling Down U.S. RevPAR” (Sept. 30, 2025). https://www.hospitalitynet.org CoStar/STR — Weekly U.S. Hotel Performance (Sept. 2025). https://htrends.com
showing how often U.S. hotel performance metrics declined YoY (May–Sep 2025).
