As the U.S. hotel industry navigated the complexities of 2025, a stark divide emerged between states thriving on domestic demand and those struggling with declining revenues.
While traditional tourist hotspots like New York, California, Hawaii, North Carolina, and Washington grappled with significant challenges, states such as Florida, Louisiana, and Ohio experienced a robust recovery fueled by domestic travelers and high-profile events.
In New York, the luxury hotel market is facing dire conditions, with occupancy rates in Manhattan sinking to just 58.3% this April, a significant downturn from pre-pandemic levels where they often exceeded 80%.
Revenue per available room (RevPAR) is also in a downward spiral, dropping 7.6% year-over-year, as noted by STR data.
Hoteliers report sluggish business travel alongside a shortfall of international visitors, prompting many luxury establishments to reduce amenities and staff to manage costs in one of the nation’s priciest markets.
Alongside these economic pressures, a cooling global perception of New York City has made it increasingly unappealing to prospective foreign tourists.
Travel advisories, long visa wait times, and lingering repercussions from past political climates continue to deter international visitors, leading smaller hotels to struggle with fewer group bookings and shorter stays.
Compounded by rising operational costs including higher taxes and energy expenses, New York’s hotel sector finds itself precariously balancing on the brink of viability.
Moving to the West Coast, California’s hospitality landscape tells a similar tale of hardship.
In Los Angeles, RevPAR fell by 5.2% in Q1 2025 due to both weakened demand and escalating operational costs.
San Francisco faced even more drastic fluctuations, experiencing a staggering 33.9% decline in RevPAR during a pivotal week in April linked to the cancellation of key events.
Factors such as wildfires disrupting service, limited international flight options, and growing wage pressures have made profitability a daunting challenge for hoteliers.
Amidst these financial squeezes, several hotel operators have curbed marketing and renovation efforts, with some boutique establishments shuttering temporarily due to overwhelming expenses and inconsistent bookings.
Thus, while California remains a coveted destination for many travelers, hotel operators contend with a challenging environment where turning a profit seems increasingly elusive.
Hawaii, often idealized as a tropical haven, is not exempt from similar struggles.
The aftermath of the devastating 2023 wildfires continues to resonate, with visitor arrivals in Maui down more than 23% compared to pre-pandemic levels.
RevPAR across the islands has plummeted nearly 15% year-over-year, leading hotels—once full—to now navigate a landscape of sparse occupancy and reduced rates to attract guests.
The roots of Hawaii’s tourism troubles lie in its reliance on international long-haul markets like Japan and Australia, where demand has not yet rebounded fully.
Travelers currently perceive the islands as still in recovery, which stifles their willingness to visit and impacts occupancy rates.
In North Carolina, disruptions due to Hurricane Helene have dealt a significant blow to the local hotel industry.
Following the hurricane that struck in late 2024, hotel occupancy in Asheville plummeted by 74% in October and remained down 57% in November, posing a substantial threat to hotels still in the process of recovery.
Even properties outside immediate hurricane-affected areas are experiencing occupancy challenges, with Q1 hotel occupancy statewide still lagging 12% behind 2023 levels.
With corporate events declining, a cautious leisure market, and ongoing staffing shortages, North Carolina’s hotel sector finds itself operating below capacity amid a climate of uncertainty.
In Washington State, the hotel market is cooling off after a brief post-pandemic boost.
In Seattle, a 4.8% decrease in RevPAR was recorded in Q1 2025, with occupancy dropping below 60% in numerous downtown areas.
Previously buoyed by robust business travel from the tech sector, recent layoffs and a reevaluation of travel budgets have dampened demand.
The situation remains similarly bleak in Washington, D.C., where international arrivals have decreased by 6% year-over-year, particularly impacting bookings from European markets.
Hotels that catered previously to high-profile events and international dignitaries are resorting to deep discounts and service bundling to fill rooms, revealing a hospitality sector rife with uncertainty and tension.
Contrasting sharply with these struggles, Florida stands out as a beacon of recovery.
Cities like Tampa and West Palm Beach are reporting significant upticks in bookings, with Tampa’s RevPAR soaring by 11.2% year-over-year.
West Palm Beach hotels achieved an impressive occupancy rate of 76% in April, far exceeding national averages.
The state’s success can be attributed to its varied offerings—ranging from sports tournaments and medical conferences to emergency housing for hurricane relief.
With a focus on domestic tourism, year-round events, and affordable travel options, Florida’s hotel sectors are prospering where others falter.
Similarly, Louisiana’s hospitality industry saw a remarkable resurgence, catalyzed by the economic boom surrounding the Super Bowl hosted in New Orleans at the start of 2025.
During Q1, hotel revenue surged, with a 21.3% rise in RevPAR and occupancy rates climbing to over 80% in January and February.
Notably, the vibrant events calendar—including Mardi Gras and various music festivals—ensured a steady stream of visitors, propelling the local hotel sector into its best performance in years.
With staffing returning to normal levels, independent hotels in the French Quarter are seeing consistent bookings well into the upcoming months.
Ohio is also emerging as a surprising success story in the current hospitality climate, riding the momentum of regional event-driven travel.
Cities like Columbus have notably exceeded expectations with a 9.6% jump in RevPAR during Q1, while average daily rates also saw a 4.1% increase.
Events such as business conferences and state tournaments have invigorated the hospitality scene, with mid-sized markets like Dayton and Akron sharing in this upward trend.
Hotel operators attribute their success to a blend of competitive pricing, loyal local guests, and a busy schedule of events.
While coastal states continue to struggle with recovery, Ohio stands as a model of consistency and profitability in a fragmented market.
In conclusion, the American hotel industry in 2025 encapsulates a dual narrative of growth and decline.
As certain states confront ongoing challenges that result in revenue decreases and diminished demand, other regions successfully capitalize on strategic tourism initiatives and high-profile gatherings, demonstrating resilience and adaptability in the face of an evolving landscape.
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