U.S. Hotel Occupancy Trends: October 2025 Performance Analysis and Industry Outlook

Hotel occupancy in the U.S. has gone down for the eighth month in a row.

In October 2025, hotel occupancy in the U.S. fell for the eighth month in a row, continuing a trend that had been going on for a year. The industry is seeing tighter revenue cycles in key areas as consumer travel patterns change and economic pressures change the demand for lodging. Based on a full look at occupancy, ADR, and RevPAR behavior, we look at hotel performance across the country, challenges that come from the market, and expectations for the future.

National occupancy performance is getting worse in important markets.

Occupancy levels in October 2025 were lower than in October 2024. This was mostly because fewer people were traveling for fun and businesses were booking rooms more slowly. The biggest drops happened in major metropolitan markets, which usually depend on conventions and business travel. The biggest drops from one year to the next were in urban areas in the Northeast and West. Some Sunbelt markets, on the other hand, were more stable because they had a variety of demand sources.

Operators are adjusting to lower demand, so ADR growth is slowing.

In October, the growth rate of ADR (Average Daily Rate) slowed down as operators changed their plans to keep occupancy stable. Hotels didn’t raise their rates too much; instead, they used segmented pricing and tactical discounts to keep their market share. Even though ADR stayed slightly positive in some areas, the weaker demand made it harder to grow revenue and put more pressure on RevPAR.

RevPAR Drops Significantly Year After Year

In most U.S. markets, RevPAR (Revenue Per Available Room) went down because occupancy rates went down and ADR growth slowed. RevPAR dropped the most for midscale and economy properties because price-sensitive travelers changed how often they traveled. Upper-upscale hotels also saw a big drop in revenue because of group cancellations and less business activity.

Demand for group travel and conventions is going down.

In October 2025, the group travel industry saw a big drop. Compared to last year, a number of big events changed their dates or had fewer people attend. This led to fewer contracted room nights and bigger drops in block bookings. Markets that depend on conventions had trouble with slower event pipelines and postponed business meetings, which had a direct effect on how many people stayed on weekdays.

After the peaks of the pandemic, leisure travel returns to normal.

Leisure travel, which helped the industry get back on its feet from 2021 to 2023, continued to return to normal in 2025. Because of the economy’s uncertainty and changing spending habits, travelers were more careful. In several vacation-oriented submarkets, fewer people stayed over the weekend because they had shorter trips and less free time to travel.

Business travel recovery comes to a halt

Companies are still using hybrid work models and limiting nonessential travel, so corporate travel is still below 2019 levels. In October, midweek bookings didn’t change much, especially for secondary and tertiary business destinations. Travel managers still put cost control first, which means fewer business trips that last more than one day and tighter travel budgets.

Extended-stay hotels are better than regular hotels.

Hotels that cater to people who stay for a long time did better than hotels that cater to people who stay for a short time. There was a steady demand for long-term housing, which was driven by project-based workers, families moving, and corporate housing. This part of the industry was able to deal with the overall softness by having stable ADR and higher occupancy rates.

Luxury and resort markets are under pressure to lower their prices.

Luxury and resort-tier hotels, which used to see big increases in ADR, now say that rate growth has leveled off. Travelers to destinations were more sensitive to prices, and international inbound travel slowed down because currency exchange rates were unstable and the global economy was weak. To stay competitive, resort owners started offering packages that were based on value.

Different Levels of Demand in Different Areas Show how the market is split up in the Northeast

High-density urban corridors saw big drops in occupancy because fewer people were traveling for business and there were fewer conventions.

In the Midwest

Submarkets driven by industry and logistics did better, but they still saw small drops because weekday travel was slower.

South

Demand in Sunbelt states stayed pretty stable, thanks to population growth, sports events, and a wide range of tourism options.

West

Gateway cities saw fewer international visitors and less demand from groups, which led to big losses in RevPAR.

Costs of doing business Keep putting pressure on profit margins.

In 2025, the cost of labor, insurance, and utilities went up, making it even harder for hotels to make money. To keep costs down, operators used automation tools, dynamic scheduling, and strategies for optimizing energy use. Even with these efforts, margins got tighter as revenue indicators got weaker.

Hotels Use Technology to Keep Performance Steady

To deal with changing demand, hotels are using more and more digital tools for guest engagement, revenue management, and predictive analytics. Automation of check-ins, mobile concierge services, and AI-supported pricing strategies all helped make operations more efficient.

Forecast: A moderate recovery is expected in early 2026.

Indicators that look ahead suggest that demand may stabilize in early 2026. Group bookings for spring conventions are starting to look better, and international travel pipelines are expected to get stronger as the world’s economies become more aligned. The speed of recovery, on the other hand, will be very different in different areas and groups.

How hotels are dealing with the downturn in 2025: data-driven revenue optimization

We use advanced analytics to make better decisions about rates, look at booking windows, and find small market opportunities. This method makes it easier to allocate inventory and make targeted rate changes.

Better programs for keeping guests

Loyalty rewards, personalized messages, and improvements to the stay experience are all important ways to get people to stay again and improve overall occupancy rates.

Measures of Operational Efficiency

We use technologies that save labor, optimize housekeeping, and centralized procurement systems to cut costs without lowering guest satisfaction.

Strategic Marketing and a Mix of Different Channels

Digital campaigns that are focused, better ways to book directly, and partnerships with niche travel platforms all help to reduce demand fluctuations.

Looking ahead to 2025–2026: Getting ready for a more stable market

The hotel industry needs to change with the times as we get closer to 2026. Travelers’ needs are changing, the economy is changing, and the way people do business and have fun is changing. During the recovery cycle, staying ahead of the competition will depend on data-driven forecasting, flexible operations, and new ways to improve the guest experience.

We keep an eye on national and regional performance indicators to give hoteliers timely information and strategic advice.