CBRE, the global commercial real estate and investment services company, has revised its forecasts for the hotel sector in the second half of 2025, pointing to a deceleration in revenue per available room (RevPAR) growth across key markets.

The revision reflects a combination of evolving market dynamics, geopolitical factors, and shifting travel trends worldwide.

US and Canada see mixed performance

In the United States, RevPAR growth for 2025 has been revised down to 0.1% from an earlier projection of 1.8%.

This adjustment is linked to a quieter hurricane season, fewer election-related events, higher tariffs, and intensified competition from alternative lodging options such as short-term rentals.

By contrast, Canada is expected to maintain a more positive outlook, with a projected 2.4% RevPAR increase. Strong domestic travel and steady inbound visitors from the U.S. underpin the country’s moderate growth in hotel revenue.

Robust gains in Latin America and Europe

Northern Latin America has experienced significant growth in tourism this year, with countries including Mexico, Costa Rica, Colombia, and the Dominican Republic reporting rising visitor numbers.

This upward trajectory is anticipated to continue through the remainder of 2025.

Across Europe, international tourist arrivals remain strong, although RevPAR growth is expected to moderate to between 2% and 5%.

Some markets are achieving higher occupancy rates due to cautious rate setting, highlighting regional variation in performance.

Asia-Pacific and Middle East trends

In the Asia-Pacific region, excluding mainland China, international arrivals increased by 9% during the first half of 2025, largely driven by tourism in Japan, Vietnam, and Korea.

While average daily rate growth has slowed in many markets, countries such as Japan, Korea, Vietnam, and India are projected to post the strongest RevPAR gains for the year.

The Middle East has also shown solid hotel performance, particularly in the UAE, where Abu Dhabi and Dubai benefited from a busy exhibition season and new leisure attractions.

Most Saudi Arabian markets recorded RevPAR growth as well, reflecting the region’s continued appeal to international and domestic travellers.

CBRE’s revised outlook highlights the varied pace of recovery and growth across the global hotel sector. While some regions continue to expand, others face headwinds that are reshaping revenue expectations for the remainder of 2025.