In its 2025 State of the Hotel Industry report, the American Hotel & Lodging Association forecasts that guest spending will hit another record high. Released in in collaboration with silver partner Accenture, the report finds an industry continuing to evolve, still struggling with rising costs but seeing great potential in trends that include changes in guest spending and traveler behavior, as well as upcoming major sports and entertainment events.
Despite inflationary and economic challenges, guest spending across lodging, transportation, retail, restaurants and other expenditures in local economies at U.S. hotels is projected to reach a record high of $777.25 billion in 2025. It surpasses the previous record of $747.17 billion in 2024.
The report also found that hotel property-level costs rose faster than revenue, and specific expenses associated with operations and maintenance, sales and marketing, and IT rose nearly 5 percent apiece in 2024.
Workforce
Hotels are projected to pay employees a total of $128.47 billion in wages, salaries and other compensation in 2025, setting a new record over last year’s $125.79 billion. Hotels are expected to add another 14,000 employees in 2025, bringing total employment to more than 2.17 million—which is still lower than pre-pandemic levels.
A December 2024 survey by AHLA and AHLA Gold Partner Hireology revealed that 64.9 percent of respondents are still dealing with staffing challenges. To attract and retain employees, hoteliers are focusing on three main strategies: raising wages (47.5 percent), offering more flexible work hours (19.6 percent), and providing hotel discounts (13.4 percent). Other efforts include offering enhanced benefits, collaborating with local workforce organizations, and both advertising and participating in job fairs.
Additionally, 72.1 percent of respondents believe that opportunities for career advancement are better than ever or have remained the same since the pandemic. Indeed ranks hotel housekeeping jobs among the top 12 careers for upward mobility, emphasizing the potential for promotion to management positions after just a few years of experience.
Occupancy, ADR and RevPAR
U.S. hotel occupancy is projected to reach 63.38 percent in 2025, just 2.42 percentage points shy of the 2019 level of 65.8 percent and a notable recovery from 2020’s historic low of 43.89 percent, according to Oxford Economics and STR data. However, 2025’s expected average occupancy rate represents just a slight increase over both 2023 (62.97 percent) and 2024 (63.01 percent).
Average daily rate will continue to climb, although modestly. In 2022, ADR reached $149.50, surpassing 2019’s level of $131.56, and continued to improve from there. In 2024, ADR came in at $159, lower than the forecasted $160.16. ADR is likely to rise again in 2025 to a new high of $162.16, exceeding the 2024 rate by 1.99 percent.
Revenue per available room will improve slight in 2025. Nationwide, RevPAR nominally exceeded pre-pandemic levels in 2022 and has continued to improve since then. In 2024, it reached $100.19, reflecting a 2.04 percent year-over-year increase and falling just short of the forecasted $101.82. This marks a strong comeback from 2020’s low ($45.34) and a nominal improvement over 2019 ($86.56). In 2025, RevPAR is expected to rise by 2.58 percent and reach a record high of $102.78.
Hotels are projected to generate $55.48 billion in state and local tax revenue in 2025, another new record, up from $53.97 billion in 2024. That total includes $28.82 billion in lodging-specific taxes. Hotels are projected to generate $30.14 billion in federal tax revenue, also a record, up from 2024’s total of $29.55 billion.
The report describes how hotels can maximize the opportunities presented not only by major sporting and entertainment events such as the 2026 World Cup, but also by shifting demographics, new sources of revenue, and the use of technology and AI to customize guest experiences.
AHLA will publish a companion report on partner trends and insights in early March.