The U.S. hotel industry saw a remarkable rebound in mid-January 2025, with revenue per available room (RevPAR) increasing by 17.2% compared to the same week in the previous year. This surge, which took place during the week ending January 18, 2025, marks a significant recovery from the prior week’s 13.1% drop. The growth was driven by a combination of factors, including the Martin Luther King Jr. holiday weekend, numerous high-profile events, and the Presidential Inauguration in Washington, D.C.
Strong Performance in Top 25 Markets
The largest U.S. markets led the charge in this recovery. RevPAR in the Top 25 Markets rose by 26.6%, with San Francisco experiencing an extraordinary 348.3% increase, largely due to the rescheduled J.P. Morgan Healthcare Conference. Even excluding San Francisco’s exceptional performance, RevPAR in these markets increased by 17.9%, driven by higher occupancy and average daily rates (ADR). Washington, D.C. followed closely behind, with a significant 83.9% boost in RevPAR, fueled by a 224.4% weekend surge in anticipation of the Presidential Inauguration.
Weekend and Weekday Trends Across the Nation
Nationwide, weekends (Friday and Saturday) saw the highest RevPAR gains, with a 25.2% increase, buoyed by the MLK holiday. Weekdays (Monday to Wednesday) also performed well, with a 23.4% rise in RevPAR, while shoulder days (Sunday and Thursday) showed more modest results, down 0.7%. These trends were consistent across the Top 25 Markets, as well as in other regions, even when excluding the standout performances in San Francisco and Washington, D.C.
Resilient Markets Affected by Hurricanes
Hurricane-impacted markets continued to show strength, with RevPAR rising by 13.9% year-over-year. Occupancy in these areas jumped by 11.1 percentage points, and ADR saw a 10.2% increase. Greenville/Spartanburg led with a 72.6% growth in RevPAR, while 12 of the 13 affected markets posted double-digit increases. These markets have sustained consistent growth since Hurricane Helene’s landfall, showcasing a remarkable recovery.
Growth Across Hotel Segments
Every hotel segment saw RevPAR growth, with the Luxury segment experiencing the largest increase at 37.7%. Midscale and Economy hotels also saw positive results, particularly in hurricane-impacted areas. Excluding exceptional markets, RevPAR growth ranged from 24.9% in Luxury properties to 1.1% in Economy hotels.
Impact of Wildfires in Greater Los Angeles
The wildfire-affected regions near Los Angeles saw a 7.5% rise in demand from January 7 to 18. Submarkets like Pasadena, Glendale, and Burbank experienced a significant 33.6% increase in demand, with other nearby areas such as Palm Springs, Santa Barbara, and Riverside also reporting strong double-digit growth. However, demand declined in Downtown Los Angeles and Hollywood/Beverly Hills, where RevPAR fell by 7.7% and 15.8%, respectively. Overall, RevPAR in the greater Los Angeles area rose by 9.3%, primarily due to increased occupancy.
Group and Global Travel Trends
Group occupancy in Luxury and Upper Upscale hotels rose by 4.0% year-over-year, with the Top 25 Markets seeing a 5.6% increase. San Francisco saw a dramatic spike in Group ADR, reaching $1,342—an increase of 391.9%. Transient occupancy also showed recovery, up 2.1 percentage points.
On the international front, RevPAR outside the U.S. rose by 8.1%, driven entirely by ADR growth. Japan led global markets with a 34.7% increase in RevPAR, boosted by a weaker yen. Mexico saw a 22.5% rise, supported by strong performance in the Mexican Caribbean despite a drop in demand. Germany also rebounded with an 18.5% RevPAR increase, thanks to the rescheduled Digital Life Design conference in Munich.
Conclusion
Mid-January 2025 marked a strong recovery for the U.S. hotel industry as major markets surged, hurricane-affected areas maintained momentum, and international travel showed promising growth. With robust performance continuing across various sectors, the hospitality industry is poised for a successful year ahead.