How Federal Policy Changes Are Shaping the U.S. Hotel Industry in 2025

The Impact of Federal Policy Changes on U.S. Hotel Demand

In an extensive analysis conducted by Kalibri Labs, the leading revenue performance intelligence platform in the hospitality sector, it has become evident that federal policy shifts and macroeconomic uncertainties are having a significant impact on the U.S. hotel industry. The report, titled "Navigating Market Turbulence: The Impact of Federal Policy Changes on U.S. Hotel Performance and Demand Outlook," utilizes data from over 35,000 hotels to underscore the effects of these changes across different travel segments and regional markets.

Key Findings and Trends

The analysis highlights mixed performance trends observed between January 2024 and early April 2025. Among the 334 U.S. markets assessed, 53% reported year-to-date declines in hotel demand, with decreases as high as 22%. In contrast, 47% of these markets either maintained stable performance or showed improvement. Particularly alarming is the cumulative drop in total U.S. room night volume, which has decreased by 1% year-over-year, while future bookings are lagging 4% behind the levels seen in 2024.

In terms of government-related travel, the results are even more striking. A staggering 76% of the examined markets witnessed declines in government per-diem transient room nights, indicating that total government per-diem bookings are down by 9% year-to-date, with projections for future reservations sitting at a whopping 20% below the already dismal figures of 2024.

District of Columbia: A Case Study

Specific areas have shown pronounced vulnerability to federal policy shifts. For instance, the Washington, D.C. metropolitan area has experienced a 20% year-to-date drop in government per-diem bookings. Looking ahead, the future bookings in this region indicate a stark 44% decline over the 30 days leading up to April 2025. This highlights the immediate effects of policy changes on travel patterns and business operations.

Expert Insights

Cindy Estis Green, the Co-Founder and CEO of Kalibri Labs, provided her perspective on the findings. She noted that federal policy adjustments are reshaping travel patterns, which directly influence both business planning and hotel profitability. Green emphasized, "We have always seen muted travel growth during times of economic uncertainty and the duration and extent of the disruption is not yet known. To navigate this evolving landscape, commercial teams need a granular, real-time view of demand. Precision—not broad targeting—will define the winners in today's hospitality market. Consumers and businesses will always return to traveling, but the short-term decisions made to manage this turbulent period are critical as they can affect long-term hotel results for years to come."

Looking Ahead

With disparities becoming more pronounced between chain classes and segments like corporate and government travel facing increasing challenges, it's imperative for hotel stakeholders to reassess their assumptions regarding demand and profitability. Kalibri Labs' report serves as a nuanced roadmap, providing critical insights broken down by individual market, segment, and rate category. Regular updates will be available each week and will continue to provide vital information to those involved in the hospitality industry.

Download the White Paper

For those interested in exploring the comprehensive data and insights from this report, the full white paper can be accessed at Kalibri Labs.

About Kalibri Labs

Kalibri Labs harnesses a proprietary database that consolidates actualized and projected booking data from over 35,000 hotels. Their AI-backed models assist hotel owners, operators, and developers in enhancing profit margins and asset value, navigating through the complexities of today's shifting hospitality landscape.