State and Regional Lodging Forecast (May 2025)

Forecast through 2028 of key lodging indicators — including supply, demand, occupancy, average daily rate, revenue per available room, and revenue — for California and its 12 tourism regions.

• According to Tourism Economics’ May Lodging Forecast, California’s lodging industry is expected to see just a slight 0.2% increase in room revenue in 2025.
• Modest ADR growth is expected to be largely offset by weak demand in 2025, resulting in minimal overall revenue growth.
• Supply growth is projected to compound weak demand, leading to a 1.5% decline in statewide occupancy in 2025, with non-gateway regions facing a steeper 2.5% drop.
• Declining international arrivals and a weakening U.S. economy are projected to result in a slight 0.5% drop in hotel demand in 2025.
• Several major events in 2026, including the Super Bowl in San Francisco and FIFA World Cup matches in Los Angeles and San Francisco, are expected to boost next year’s ADR and room revenue.
• The forecast is clouded by an abnormally high degree of uncertainty.  The administration’s trade policies remain in flux, making it difficult to project the full economic impact. Additionally, first-quarter lodging data is skewed from wildfires, the timing of Easter (April this year versus March last year), and a favorable comparison to a soft Q1 in 2024 related to heavy rains throughout the state.