U.S. Hotel Recovery Slows as Q2 RevPAR Falls and Financing Tightens

CBRE’s revised outlook warns of sustained margin pressure driven by tighter financing cutting into hotel profitability

Overview

U.S. hotel RevPAR declined 0.5% in Q2 after a 1.0% rise in ADR could not offset a 1.4% drop in occupancy.
Inbound international arrivals fell 3.4% in June, widening the imbalance with outbound travel and weighing on demand.
Short-term rentals gained share of lodging demand to 14.6% in June and posted 5.8% RevPAR growth year-over-year.
CMBS issuance plunged from $2.9 billion in June 2024 to $0.9 billion this year as average rates climbed to 7.8% and spreads widened by 50 basis points.
CBRE cut its 2025 GDP forecast to 1.5% and raised its near-term CPI outlook to 2.9%, forecasting sustained margin pressure through 2026.