US hotel revenue keeps growing, fueled by higher-than-expected demand
US hotel revenue keeps growing, fueled by higher-than-expected demand
Week ending April 25 notches highest occupancy of the year so far
Pittsburgh hosted the 2026 NFL draft at Acrisure Stadium, shown here on April 23. The city had the highest revenue per available room gain the week of the draft. (Getty Images)
https://www.costar.com/article/677169035/us-hotel-revenue-keeps-growing-fueled-by-higher-than-expected-demand?
With another set of easy comps against Easter week 2025, U.S. hotel revenue per available room jumped 8.5% on nearly equal gains in occupancy and average daily rate for the week ending April 25.
This marks the third consecutive week of RevPAR gains and the highest weekly occupancy of the year so far at 67.7%, according to data from STR, CoStar's hospitality benchmarking firm. Demand was better than expected, and the year-over-year growth rate mirrored what was seen in 2015, a year that had the same calendar makeup as 2026, with Easter falling on the same day, April 5.
While there is no doubt that the same week last year was weaker due to Easter, resulting in strong growth rates, we still believe that something has changed, as weekly demand was the highest since October.
A year ago, demand really wasn’t that weak, as it only fell by 122,000 room nights year over year, while this year it gained more than 1.1 million. Since February, demand has grown every week except for two, and that was due to Easter and Passover observances. Demand in the first 115 days of this year is up by more than 8.2 million room nights.
This week’s group demand among luxury and upper upscale hotels was also the best since September 2024. It increased by 22% and accounted for all of the demand gain in those hotels as transient was down -0.4%.
Orlando and San Diego saw the largest declines in transient demand, which we attribute to the change in spring break travel. A year ago, a fair number of families with school-age children were on vacation due to the late Easter.
A broader review of markets revealed that the top 25 markets saw the largest RevPAR gains at 11.9%, fueled by strong demand and ADR growth.
The growth was widespread, with all but four top 25 markets seeing flat to declining RevPAR. Leaders included Atlanta, Chicago, New Orleans, St Louis, and Washington, D.C., where the group drove most of the market demand gain and double-digit RevPAR growth.
Most of these markets saw demand growth significantly above the decline they observed a year ago. Eight markets saw their highest weekly demand of the year, with seven seeing their highest weekly demand since October. Washington posted its second-highest weekly demand of the past six years.
Pittsburgh had the highest RevPAR gain of any market this week, up 71.1% for the week, the city hosted a record crowd for the 2026 NFL draft.
Group demand drove demand gains in most markets, but the percentage of group to total demand growth was higher in the top 25 markets versus the remaining ones — 71.8% compared to 51.8%.
Given the predominance of group this week, it’s not surprising that luxury and upper upscale class hotels had the highest weekly RevPAR gains, at 10.1% and 11.5%, respectively. Occupancy for luxury, upper upscale, and upscale reached its highest level for these hotels, up 75% for the latter two and 73.7% for the former. Additionally, occupancy for those three classes was among the 10 highest of the past 68 weeks. Luxury and upper upscale hotels combined had the 10th highest occupancy in a 121-week stretch going all the way back to 2024.
Weekdays also outperformed the weekend due to the group. Not surprisingly, Sunday saw the largest gain against an easy Easter comp. Demand tapered down and turned negative over the weekend. Weekday RevPAR was up 15.5%, with the weekend down 3.3%
In the next two weeks, we expect RevPAR to be flat to down in the week ending May 2nd before rising again in the following week if performance follows the same pattern observed in 2015. The slowdown in performance will be due to slowing demand as conference season gives way to school graduations and the beginning of the summer travel season.
April is on track to see another RevPAR gain. With five days remaining in the month, we predict monthly RevPAR to be around 3.9% due to higher demand and ADR.
Global RevPAR bounces back
Despite the war in Iran, global demand excluding the U.S. rebounded with RevPAR rising 3.8% on a same-store, constant U.S. dollar basis. Italy and Germany led with RevPAR growth of more than 53%. Excluding the Gulf Cooperation Council (GCC) countries, RevPAR was up 9.7%, mostly on ADR.
GCC RevPAR fell by more than 50%, its seventh weekly decrease. The largest demand decline was again in the U.A.E., where it was down by more than 700,000 room nights.
Weekly RevPAR was down in Australia, Mexico, and Latin America. In Mexico, key tourist destinations were again down, which we attribute in part to the shift in spring break from a year ago.
Hyatt reports gains following 'dynamic quarter'
Company sees US strength amid outsized obstacles in Mexico, Jamaica
Hyatt opened around 151,000 rooms in the first quarter. Andaz Lisbon — and its restaurant, Luzzi — opened in March. (Hyatt)
https://www.costar.com/article/159668591/hyatt-reports-gains-following-dynamic-quarter?
While Hyatt Hotels Corp. is facing outsized international headwinds, the hotel company's first-quarter results exceeded expectations, driving Hyatt to slightly raise its full-year outlook.
On the company's earnings call, CEO and President Mark Hoplamazian kicked off his remarks by acknowledging the "recent events in the Middle East," and said the situation is being closely monitored. He also mentioned the "isolated security concerns in Mexico" in February, noting that Hyatt's properties and guests were unaffected by a raid by the Mexican Army Special Forces to target drug cartel violence.
Although Hyatt's hotels did not face any major safety events during the unrest in Mexico, it did impact performance for the company. However, Hoplamazian said Hyatt was able to redirect some of its Mexico bookings to its Dominican Republic properties. Additionally, in Jamaica, Hyatt still has hotel closures due to damage from Hurricane Melissa.
"In terms of gross fees, Mexico represents about 10% of our total gross fees," Hoplamazian said on the call. "The Dominican Republic represents about 6%, and Jamaica represents about 1%, so as we talk about these markets, I think it's important for everyone to understand the relative size."
Joan Bottarini, Hyatt's chief financial officer, said the company reported a 4% decline in revenue per available room in the Middle East due to the war in Iran.
Despite navigating "a very dynamic quarter," Hoplamazian said overall RevPAR performance exceeded expectations and was driven by its luxury brands. RevPAR in the United States was also better than expected, he added, and Bottarini reported 3.3% year-over-year RevPAR growth in the U.S.
"We are increasingly positive about the outlook for the United States. Forward booking trends in the United States are strong for the balance of 2026, with group pace for full-service hotels up in the mid-single digits for the remainder of the year," Bottarini said. "We continue to hear positive feedback from our group of corporate customers about their intent to travel this year, and we expect strong leisure trends to continue."
Another region Hyatt is particularly excited about is China. Bottarini said the country saw a 12% year-over-year increase in RevPAR in the first quarter. Meanwhile, Europe saw a 7.5% increase in RevPAR, thanks in part to the Olympics in Italy.
"We believe the improved performance in the United States supports increasing our full-year system-wide RevPAR growth outlook to between 2% to 4%," Bottarini said.
She added that RevPAR in the U.S. specifically is expected to grow between 2% and 3%. On its last earnings call in February, Hyatt projected full-year 2026 RevPAR growth to be between 1% and 3%.
As for his expectations for the rest of the year, Hoplamazian said he sees promising activity for group business, which Hyatt has steadily grown over the past nine months. And, he added, luxury remains strong.
"If there's any sign of weakness in terms of the high-end customer, we have not seen it. Of course, I think we are playing the game differently and are also really focused on the clients that we serve and how we go to market. And I think our relative performance is a reflection of that."
By the numbers
Hyatt's comparable system-wide hotels’ RevPAR increased 5.4%, compared to the first quarter of 2025, according to the company's earnings release. For its all-inclusive resorts, comparable system-wide net package RevPAR increased 7.4% compared to the first quarter of 2025.
Hyatt's net income was $38 million, and adjusted net income was $61 million.
"As of March 31, we had total liquidity of approximately $2.2 billion, including $1.5 billion of capacity on our revolving credit facility," Bottarini said. "In the first quarter, we repurchased $135 million of Class A common stock, returning approximately $149 million to shareholders through share repurchases and dividends. We ended the quarter with $543 million remaining under our share repurchase authorization."
For pipeline growth, Hyatt reportedly secured franchise contracts for the addition of 151,000 rooms in the quarter, an increase of 9.4% compared to the first quarter of 2025.
As of press time, Hyatt's stock was trading at $168.74 a share, up 49.75% year over year. The NYSE composite was up 20.46% for the same period.
The Year of Quantum: From concept to reality in 2025
https://www.mckinsey.com/capabilities/tech-and-ai/our-insights/the-year-of-quantum-from-concept-to-reality-in-2025
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Our fourth annual Quantum Technology Monitor report shows that surging investment and faster-than-expected innovation could propel the quantum market to $100 billion in a decade.
When it comes to quantum technology (QT), investment is surging, and breakthroughs are multiplying. The United Nations has designated 2025 the International Year of Quantum Science and Technology, celebrating 100 years since the initial development of quantum mechanics. Our research confirms that QT is gaining widespread traction worldwide. McKinsey’s fourth annual Quantum Technology Monitor covers last year’s breakthroughs, investment trends, and emerging opportunities in this fast-evolving landscape.
In 2024, the QT industry saw a shift from growing quantum bits (qubits) to stabilizing qubits—and that marks a turning point. It signals to mission-critical industries that QT could soon become a safe and reliable component of their technology infrastructure. To that end, this year’s report provides a special deep dive into the fast-growing market of quantum communication, which could unlock the security needed for widespread QT uptake.
Our new research shows that the three core pillars of QT—quantum computing, quantum communication, and quantum sensing—could together generate up to $97 billion in revenue worldwide by 2035. Quantum computing will capture the bulk of that revenue, growing from $4 billion in revenue in 2024 to as much as $72 billion in 2035. While QT will affect many industries, the chemicals, life sciences, finance, and mobility industries will see the most growth.
We conducted extensive analysis to project the 2035 global market sizes for each of the three pillars of QT. We found that by 2035, quantum computing could be worth $28 billion to $72 billion, quantum communication could be worth $11 billion to $15 billion, and quantum sensing could be worth $7 billion to $10 billion—for a total of as much as $97 billion. This growth shows no signs of slowing. We predict that by 2040, the total QT market could reach $198 billion. We present our market size estimates as a range because of the large variance in potential technological progress, adoption rates, and scaling opportunities for QT in the decade to come.
Gaining momentum in investments
More funding for start-ups
Private and public investors are increasingly confident that QT start-ups will generate measurable value. In 2024, they poured nearly $2.0 billion into QT start-ups worldwide, a 50 percent increase compared to $1.3 billion in 2023. Private sector funding from venture capital and private equity firms accounted for two-thirds of that total, or about $1.3 billion, a decline of 19 percentage points compared with 2023. Public funding took up the reins, increasing 19 percentage points relative to 2023 to account for 34 percent of 2024 funding, or $680 million. This shows increased urgency from governments to invest in QT’s potential.
Significant private and public entities investing in QT start-ups in 2024 include SoftBank’s partnership with Quantinuum and Aramco’s investment in Pasqal. Japan’s National Institute of Advanced Industrial Science and Technology’s collaboration with QuEra and IonQ and Qatar Investment Authority’s partnership with Alice & Bob are other examples of major investments in this space.
Two late-stage start-ups, PsiQuantum and Quantinuum, received half of the total investment in 2024, underscoring investors’ confidence that mature, established start-ups will continue to grow. Our research indicates this is already happening; quantum computing companies alone generated $650 million to $750 million in revenue in 2024 and are expected to surpass $1 billion in 2025. This revenue surge comes from continuous growth in the deployment of quantum hardware across private industry and the defense sector.
When it comes to early-stage companies, most new start-ups launched in 2024 are developing equipment and components or application software. Overall, we anticipate a value shift with QT start-ups moving from hardware toward software in the next five to ten years.
Increasingly, these new start-ups are being created in innovation “clusters” that group together start-up accelerators, academic institutions, research centers, and investors. Quantum start-ups are actively partnering with regional and national authorities to create these clusters, which often include the construction of greenfield QT manufacturing and computing facilities. There are several emerging hubs in Asia, especially in Abu Dhabi, Tel Aviv, and Tokyo, and growing clusters in the United States—in Illinois and Maryland, for example.
A surge in public funding
Global governments’ $680 million worth of investments in QT start-ups in 2024 was only part of their commitment to the sector. Overall, governments announced $1.8 billion in funding for all types of QT endeavors in 2024. For example, the Australian government announced a $620 million financial package for PsiQuantum to build the world’s first utility-scale, fault-tolerant quantum computer in Brisbane. Meanwhile, the State of Illinois announced a $500 million investment in the development of a quantum park. Asian investments also rose in 2024, led by Singapore’s approximately $222 million investment in QT research and talent. Five of the 19 new QT start-ups founded in 2024 are based in Asia, underscoring the region’s emerging dominance in the field.
The government-backed QT financing trend shows no signs of slowing. In fact, it accelerated in the first months of 2025 when Japan announced a $7.4 billion bet on the sector, and Spain committed to investing $900 million, bringing announcements for public financing to more than $10 billion.
Breakthrough innovations
For the first time since McKinsey began monitoring the QT market four years ago, we see a shift from development to deployment. Much of the innovation that emerged in 2024 has made QT safer and more secure. And while the QT start-up ecosystem is fertile ground for potential breakthroughs, leading technology companies drove the bulk of change in 2024. Companies such as Amazon, Google, IBM, and Microsoft continued to progress in quantum innovation, unveiling key breakthroughs that signal a new era for the industry. Notable recent advancements from large companies include the suppression of error rates relative to the number of qubits; the development of multiple high-fidelity qubits; and substantial reductions in the cost of quantum error correction.
Quantum control solutions
Our research shows that start-ups and large companies also made progress in 2024 within quantum control solutions—the hardware and software that enable quantum systems to perform critical functions such as qubit initialization, gate operations, error correction, and readouts. For example, Australian start-up Q-CTRL partnered with Nvidia and OQC to overcome computational bottlenecks in error suppression. Other companies also made progress, including IBM, Keysight, Kipu Quantum, Quantum Machines, Qedma, and Zurich Instruments.
The critical role of error correction
Error correction, a critical element of quantum control, emerged as a key innovation in 2024, with Google’s Willow quantum computing chip demonstrating significant advancements in error correction and performance. With 105 physical qubits, Willow can perform certain complex calculations exponentially faster than supercomputers and with a low error rate. Start-ups, too, showed progress on error correction. For example, Alice & Bob presented a new quantum error correction architecture, Riverlane unveiled a hardware-based quantum error decoder with enhanced speed and efficiency, QuEra launched a logical quantum processor based on reconfigurable atom arrays, and Atom Computing collaborated with Microsoft to deliver quantum error correction.
As the number of qubits grows, effective error correction—as well as suppression and mitigation—is no longer optional. Ensuring QT systems are less prone to error is essential for achieving the stability and accuracy needed to deploy quantum applications at scale.
Progress on patents
With an eye to cementing early advantage in the QT sector, companies are patenting their breakthroughs. Our research shows a 13 percent increase in the number of QT patents granted in 2024 compared to a year earlier. IBM had the highest number (191), followed by Google with 168.
On a country level, China and the United States filed the most QT patent applications in 2024, with China leading in quantum computing patents. Meanwhile, the United States led in quantum communication patents, propelled by the efforts of national labs such as the National Institute of Standards and Technology and research institutes. These advancements highlight the United States’ strategic focus on advancing the field of quantum security.
Gaining traction in quantum communication
The potential arrival of Q-Day, when quantum computers become powerful enough to break current encryption standards and critical digital infrastructure worldwide, represents a major shift in security. Companies will need to rethink their global security strategies—and adopting quantum communication will be a cornerstone of their new approach. Quantum communication technologies allow the secure transfer of quantum information at scale, and the market is growing quickly.
By analyzing current product offerings and emerging technological trends, we estimate that the total quantum communication market size was $1.2 billion in 2024 and that it will reach $10.5 billion to $14.9 billion by 2035—representing a CAGR of 22 to 25 percent over the next decade.
The quantum communication landscape comprises three key categories—security, networks, and services. Within these, we analyzed six important verticals—quantum key distribution solutions, post-quantum cryptography (PQC), modular interconnects, regional networks, quantum global internet, and quantum communication services. In 2024, the vertical with the most commercial maturity was PQC, which focuses on building algorithms to withstand attacks from quantum computers. PQC technology is critical to ensure data security on Q-day and beyond.
Our research shows that governments are currently the largest purchasers of quantum communication technologies, at approximately 57 percent of all purchases in 2024, but the private sector is increasingly adopting the technology. By 2035, for instance, our analysis shows that the telecommunications sector is expected to account for 16 to 26 percent of overall spending on quantum communication products.
The quantum communication value chain ranges from components, hardware, and application software to quantum network operators and services. Hardware is still emerging but holds significant promise. For instance, long-distance communication requires quantum repeaters, or hardware devices that amplify the signal. Start-ups and big-tech players alike are racing to develop repeaters and other hardware, even while the software market itself is still small. Doing so will allow companies to get ahead in the quantum communication market and be ready with their hardware devices when the software side catches up.
Advances in quantum sensing
Quantum sensing has entered a pivotal phase, and real-world application development will be central to unlocking its full potential. The field saw significant breakthroughs in 2024 and early 2025, particularly in use cases across defense and semiconductors. With quantum sensing technology maturing beyond foundational research, the focus is now on production and deployment. Notable advances over the past year include NASA’s first demonstration of an ultracold quantum sensor in space; Q-CTRL’s use of quantum magnetometers to navigate GPS-denied environments; QuantumDiamonds’ launch of a diamond-based microscopy tool for semiconductor failure analysis; and SandboxAQ’s introduction of AQNav, a real-time, AI-driven quantum navigation system.
Looking ahead
QT delivers value not only on its own but also by unlocking powerful synergies with other cutting-edge technologies. Our research explores how QT could both influence and be shaped by four key innovation domains:
- AI and machine learning, robotics, sustainability and climate tech, and cryptography and cybersecurity. AI and machine learning have the potential to accelerate quantum hardware development through AI-driven material discovery, while quantum computing offers transformative leaps in computational power that could redefine the scale and speed of AI model training.
- Robotics plays a key role in advancing quantum technology by streamlining the manufacturing of quantum components. In turn, robotics can potentially benefit from all three pillars of quantum technology: Quantum computing can boost computing power and software optimization, quantum communication can support secure networks, and quantum sensors can enhance the precision of robots.
- Sustainability and climate tech stand to benefit from quantum advances, particularly in computing, because these advances can accelerate material discovery, improve modeling of complex systems such as molecular interactions or climate forecasting, and optimize production processes.
- Cryptography and cybersecurity could be fundamentally reshaped by quantum technology, posing new risks—such as QT’s potential ability to break current encryption—while also boosting next-generation protections, including key distribution, random-number generation, and cryptographic methods designed to withstand quantum attacks.
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