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Puerto Rico leads in hotel performance compared to limited growth in the U.S.

Monday, October 20, 2025 Research

Puerto Rico leads U.S. hotel demand growth in August

According to the U.S. Travel Association, Travel spending in the U.S. in August held slightly above last year’s levels, marking the second consecutive month of modest growth—up just 0.2%. Domestic air travel rose 1.0% in August, extending July’s momentum during the critical summer travel season. Hotel demand remained soft, down 0.4% year-over-year, while short-term rental demand grew.

August 2025 U.S. Occupancy was 66.1% (-1.3%), average daily rate (ADR): US$158.93 (+0.3%), and revenue per available room (RevPAR): $105.06 (-1.0%). Among the top 25 markets, New York City experienced the highest occupancy level at 86% (-1.4%).

Puerto Rico’s August hotel lodging demand rose 9% year-over-year, leading all U.S. states and territories for the month. TSA air passenger traffic increased by 12%, and Leisure and Hospitality employment grew 5% compared to last year.

Year-to-date through August, U.S. hotel lodging demand growth is flat at -0.1% with Nevada showing the biggest decrease (-7%), while Puerto Rico is slightly better at +1%. The states with the highest year-over-year growth in demand are Mississippi, Oklahoma, and Wisconsin.

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SJU Passenger Arrivals Up 5%, Led by International Growth

In September, Aerostar reported 382,000 passenger arrivals at San Juan International Airport (SJU), reflecting a 1% increase compared to the same month last year, approximately 3,600 additional passengers. These results mirror the current 3-year average performance for September, with steady volume maintained.

Year-to-date, SJU has welcomed 5.3 million passengers, marking a 5% increase over last year and continuing its record-breaking trend. North American arrivals account for 84.9% of total traffic, the lowest share since 2018, driven by expanded international route capacity. Notably, year-to-date arrivals from South America reached 114,000 (+55%), Europe 81,000 (+21%), and Central America 89,000 (+19%).

Looking ahead, Iberia will increase non-stop service from Madrid to 11 weekly flights on October 29th and 14 weekly flights during the peak winter season, enhancing connectivity for both leisure and business travelers.

Lodging demand reaches record high in September

The total estimated lodging demand in September, as tracked by STR (Smith Travel Research) and AirDNA, reached a new monthly record with 468,000 room nights booked, a 21% increase from last year.

With hotel group blocks extending beyond the concert residency, hotels accounted for 266,000 rooms sold in September, which is a 19% increase compared to the same period last year. The rental market also experienced significant growth, with a 22% increase, resulting in 202,000 listing nights booked.

Although demand has grown significantly, September remains historically the lowest month for travel, 30% less demand than the monthly average due to its alignment with the peak of the Atlantic hurricane season.

From 280,440 in 2015 to 468,098 in 2025, total September lodging demand has shown a 67% increase over the last decade.

Year-to-date total lodging demand has reached a record 6 million room nights, an 8.7% increase from last year, with hotels slightly up (2.1%) and rentals increasing 17%. The rental market continues growing market share, with 47% of the total year-to-date lodging demand provided by rentals.

Lodging Revenues Hit $100 Million, Setting New Record

September lodging revenues reached an estimated $100 million, marking a 26% increase and setting a new monthly record. Hotels contributed $59 million, a 26% increase year-over-year, marking the strongest September performance on record. The rental segment also surged, generating $41 million, a 27% rise compared to last year.

Year-to-date lodging revenues are nearing $1.6 billion, an increase of 10% compared to last year. Hotel revenue has grown by 4% with an average rate of $300, reaching $952 million, while rentals have increased 19% generating $643 million at an average rate of $226.

September hotel RevPAR (Revenue per Available Room) reached $123 (+23%), a new high, while rental RevPAR was $76 (+7%). Year-to-date, hotel RevPAR is $218 (+1.5%) while rentals are $131 (+3%).

In comparison, according to the U.S. Travel Association, overall lodging revenue growth for the U.S. remains muted, reflecting broader economic headwinds such as sluggish GDP growth, persistent inflation, and cautious consumer spending. Hotels are experiencing flat or near-zero revenue growth for 2025, with analysts projecting a slight 0.1% decline in RevPAR for the year.