Hotel pricing in 2025: Key takeaways for hoteliers from H1 to H2

Key takeaways

• Global hotel rates slowed sharply in H1 2025 – the steepest drop since the post-pandemic years.

• Europe was the only region to grow (+2.8% YoY), while Asia and Africa fell around –20%.

• Japan stood out, with Sapporo leading global price growth at +53% YoY.

• Travelers shifted to shorter, value-focused trips closer to home.

• H2 2025 outlook: Europe strong, Middle East recovering, Asia weak, North America mixed.

The first half of 2025 brought the sharpest global hotel rate slowdown since the early post-pandemic years. After two years of steady growth, momentum stalled, and in many markets, prices fell back significantly. But the story isn’t uniform. While most regions struggled, Europe remained resilient, and Japan surged ahead as a clear outlier.

In this blog, we’ll recap the results of H1 2025 and look ahead to the second half of the year, drawing on Lighthouse’s global pricing data to understand how shifting traveler behavior and economic uncertainty are reshaping the hospitality landscape.

The global picture in H1 2025

Lighthouse’s half-year report paints a mixed picture for hotels in 2025. 

The first half of the year was defined by a widespread hotel pricing slowdown. Africa and Asia recorded the steepest year-over-year declines, with average rates falling by around 20%. Latin America and Oceania also slipped, while North America saw a more modest 4.4% decline. The Middle East saw the smallest drop of 2.2%.

Europe stood alone as the only region to register growth. Average prices rose 2.8% year-over-year, making it the global exception in an otherwise challenging half.

Regional contrasts and destination highlights

Europe’s resilience stood in sharp contrast to the declines seen elsewhere. While many regions struggled under the weight of economic uncertainty and weaker long-haul demand, many European destinations benefitted from a reputation for safety, stability, and cultural richness, which helped sustain demand even as other regions struggled. Its compact geography and strong transport links gave travelers a wide range of options within easy reach, reinforcing Europe’s appeal for short-haul trips. 

Within this environment, branded hotels have had a particularly strong first half of the year: their rates rose 4.9% year-over-year, compared with just 1.3% growth at independent properties, reflecting a wider consumer preference for the consistency and perceived reliability that chains offer during uncertain times.

Japan emerged as Asia’s clear exception in the first half of 2025, defying the region’s overall weakness. While neighboring markets like Thailand and Vietnam faced steep declines in demand and pricing pressure, Japan saw hotel rates surge.

A combination of factors fueled this performance: a weak yen has made the country more affordable for international visitors, its reputation for safety and cultural depth reassured cautious travelers, and the build-up to Expo 2025 in Osaka drew additional global attention.

This mix turned Japan into one of the world’s hottest destinations, with cities like Sapporo leading global price growth at more than 50% year-over-year. Osaka and Kobe also ranked among the fastest risers, reinforcing the sense that Japan is operating on a different trajectory from the rest of Asia.

Not every destination fared well. Southeast Asia was under acute pressure, with international arrivals falling and prices dropping sharply. In Thailand, for instance, arrivals fell 5% year-over-year, forcing hoteliers to compete aggressively for fewer tourists. Even historically high-demand European spots like Venice and Sorrento saw declines, reflecting a broader trend of travelers opting for less crowded alternatives.

Changing traveler behavior

The numbers point to a fundamental shift in how people are traveling in 2025. The era of splurging on long-haul, bucket-list trips appears to have passed, at least for now. Travelers are favoring shorter, more frequent getaways closer to home. Economic uncertainty is part of the story. With U.S. trade policy changes and ripple effects across global markets, travelers are becoming more value-conscious. Instead of luxury upgrades, many are trading down to more affordable hotel tiers. Instead of a single big annual vacation, they are spreading their travel budget across multiple smaller trips.

This behavior is showing up in pricing. Long-haul markets from Southeast Asia to the South Pacific have seen double-digit declines, while domestic and regional destinations are holding steadier. Europe has benefited most from this trend, with demand for accessible, well-connected destinations keeping prices elevated.

Looking ahead to H2 2025

The forward-looking data suggests a mixed picture for the second half of the year.

• Europe is projected to remain strong, with advertised room prices up 6% compared to H2 2024.

• Japan continues to outperform within Asia, but most Asian markets remain weak, with advertised prices nearly 10% lower year-over-year.

• The Middle East is staging a comeback, with prices up more than 4% as inbound tourism recovers.

• North America shows rising forward demand indicators, but advertised prices are still below last year’s levels, hinting at a potential recovery later in the year.

For hoteliers, the implication is clear: flexibility is essential. Forecasting, pricing, and competitive positioning will need to account for a cautious consumer mindset and fast-changing regional dynamics.

Conclusion

The first half of 2025 confirmed a slowdown in global hotel pricing, but not all regions are experiencing it the same way. Europe’s resilience and Japan’s surge stand out against widespread softness in Asia, Africa, and Latin America. 

At the same time, traveler behavior is shifting toward shorter, more frequent, value-driven trips, reshaping demand patterns everywhere.

Looking ahead, the outlook for H2 2025 remains mixed, with Europe and the Middle East showing strength, Asia under pressure, and North America in transition. What unites all markets is the need for hoteliers to adapt quickly to evolving demand and pricing conditions.

In a year defined by uncertainty, understanding the full context behind these shifts is essential. This blog highlights the headline trends, but the State of Global Hotel Pricing report goes much further. It includes region-by-region analysis, destination-level trends, and forward-looking indicators that provide a clearer view of how 2025 is unfolding, along with analysis helping you understand not just where rates are moving, but why.

By digging deeper into the data, hoteliers can anticipate demand patterns, refine their pricing strategies, and make more confident decisions in the months ahead.

Download the full report here.