US hotels ended 2025 with occupancy at 62.3%, down 1.2% year over year, and ADR at $160.54, up 0.9%, per STR/CoStar data for full-year 2025. RevPAR fell year over year — the first annual decline in the metric since 2020, per CoStar.
For hotel owners and operators, the reading matters for budget season: a year in which rate gains no longer cover softening demand leaves less room to absorb wage growth, insurance costs, and debt service without margin erosion.
The monthly trajectory told the same story into year-end. November 2025 closed at 57.9% occupancy (down 2.8%), ADR of $153.77 (up 0.6%), and RevPAR of $88.97 (down 2.3%), per STR/CoStar's November press release. December extended the pattern: per CoStar data reported by Business Travel News, occupancy in the top 25 markets ran 61.5%, down 1.5% year over year, while smaller markets ran 48.5%.
Where the weakness concentrated
The demand gap sat mainly in group and government-adjacent transient segments through the second half of 2025, per CoStar's year-end commentary, while leisure weekend demand held up better in leisure-oriented markets. Rate carried the year: ADR growth of roughly 1% was thin, but it kept RevPAR declines in low single digits rather than matching the occupancy drop one-for-one.
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What operators can take into 2026 budgeting
The practical read for operators is that 2026 forecasting should not assume the rate-led recovery resumes on its own. With occupancy down and ADR up less than 1%, revenue management teams face a compression question — where to defend rate versus where to chase volume — and the data suggests demand softened unevenly by market tier. Coastal and top-25 urban assets faced different conditions from drive-to and secondary-market properties, where December occupancy ran more than 13 points below the major metros.
Cost discipline becomes the offsetting lever when the top line stalls. Operations teams reviewing housekeeping models, F&B program profitability, and staffing curves for 2026 will be working against a flat-to-down RevPAR baseline rather than the growth assumptions many 2025 budgets carried.
STR/CoStar's January release, covering December and full-year 2025 monthly data, is the reference point most management companies will use when they finalize 2026 budgets this quarter.