Home » Canada Travel News » Mexico, U.S., And Canada Hospitality Industry To Thrive With Two Percent RevPAR Growth In 2025 As Urban Hotels Outperform, Global Tourists Return, And Demand For Luxury Stays Surges

Saturday, February 22, 2025

Mexico, U.S., and Canada hotel industry set for steady two percent growth in 2025, driven by urban market dominance, rising travel demand, and global events.

CBRE Predicts Steady Growth in Hotel Revenue for 2025, Driven by Urban Performance and Strong Travel Recovery

The hospitality sector is poised for continued expansion in 2025, with revenue per available room (RevPAR) projected to climb steadily, according to CBRE. Urban markets are expected to lead this growth, fueled by a surge in business and group travel, alongside the ongoing rebound of international inbound tourism.

CBRE anticipates RevPAR to rise by 2.0% in 2025, supported by a 23-basis-point (bps) increase in occupancy rates and a 1.6% uptick in average daily rates (ADR). This positive trajectory underscores the lodging sector’s resilience, with RevPAR set to surpass 2019 pre-pandemic levels by 16.6%.

Economic indicators play a crucial role in this outlook, with CBRE’s base forecast incorporating a 2.4% GDP growth rate and an average inflation rate of 2.5% for 2025. Given the strong historical correlation between GDP and RevPAR performance, the strength of the broader economy will be a key driver of hospitality sector growth.

Long-Term Travel Demand Bolstered by Global Events

Major international events are expected to sustain hotel demand over the coming years, including the 2026 FIFA World Cup (U.S., Mexico, Canada), the 2028 Summer Olympics (Los Angeles), and the United States’ 250th anniversary celebrations in 2026. Additionally, the continued popularity of national parks, global gateway cities, and key U.S. leisure destinations will contribute to steady RevPAR growth, projected within the 1.5% to 3.5% range annually, provided economic conditions remain stable.

Limited Supply Growth Could Drive Higher Pricing Power

The expansion of new hotel supply is likely to remain constrained due to elevated financing and construction costs, with growth expected to average below 1% annually over the next three years. Potential external factors—including tariffs, labor shortages, and the Federal Reserve’s stance on interest rate adjustments—could further slow supply expansion. This limited pipeline could, in turn, strengthen pricing power for existing hotels and drive up replacement costs for hospitality assets.

CBRE’s outlook highlights a promising period ahead for the lodging industry, with urban markets continuing to outperform and sustained demand shaping the future of hospitality.