The U.S. hospitality market remains as dynamic as ever. As 2025 draws near, here are some of the key trends we are monitoring closely:

  1. Record travel volumes are not trickling down tomarket- and asset-level performance.
  2. In 2023, U.S. travel abroad nearly matched the record levels seen in 2019. According to the National Travel & Tourism Office, Americans are spending more than ever during these trips.
  3. In contrast, the number of international visitors to the U.S. remains well below 2019 levels.
  4. ADR and RevPAR growth has not kept pace with inflation over the past year through Q3.
  5. After some recent softness, airline tickets are on the rise, outpacing the rate of inflation.
  6. Recent and ongoing labor disputes are driving up operating expenses as unions win concessions.
  7. New brands, such as AC and Moxy by Marriott, Home2 Suites and Tru by Hilton, and TRYP by Wyndham, are outperforming previous-generation brands within the same chain scales.
  8. Capital is shifting. The top markets for sales volume year-to-date through Q3 were Phoenix, Orlando, and Honolulu. Only Phoenix landed within the top 10 last year, while Honolulu ranked 58th in 2022.
  9. Borrowers’ average debt costs have declined over the past two years. With the Fed broadcasting additional cuts, this should spur further trading activity.
  10. Amid the nationwide housing shortage, increased regulation of short-term rentals is gaining traction. This move would likely boost hospitality performance at the local level, particularly ADR.