Uncertainty in the global economy has made budgeting and forecasting especially tough this year, leaving many hoteliers unsure what 2026 will bring. But a closer look at data from 2025 offers some valuable clues.
As part of our new strategic partnership, Duetto and Cloudbeds have teamed up to produce our first-ever Hotel Market Pulse report. This is part of our shared mission to empower hoteliers with advanced tools — and insightful data — for optimizing revenue and operational efficiency.
This analysis covers guest booking and hotel performance data from January 1 to July 31, 2025, comparing the results to the same period in 2024. We focus on two key areas: traveler booking behavior and hotel profitability.
This analysis is based on aggregated, anonymized data from Cloudbeds and Duetto customers, covering approximately 20,500 independent lodging properties across 177 countries. The sample includes properties ranging from boutique hotels and bed & breakfasts to vacation rentals and small hotel chains, with representation across economy, midscale, upscale, and luxury segments. Data reflects actual reservations, revenue, and operational metrics reported through the Cloudbeds property management system and Duetto revenue management system during the specified period.
What key booking trends emerged this year? Analyzing data from tens of thousands of independent lodging businesses worldwide, the team found notable shifts in distribution channels, room rates, and length of stay (LOS).
Tracking distribution is a bit like watching a Formula 1 race, with some channels zooming ahead while others lag behind. This year, four players picked up significant momentum in the race for market share.
Expedia pulled ahead in room-night volume by almost 12% year over year (YoY), while Trip.com, Hotelbeds, and Despegar (Decolar in Brazil) each jumped by more than 35% year over year, based on booking data from properties in the Cloudbeds network. These gains came largely at the expense of longtime frontrunners like Booking.com, Agoda, and Vrbo.
The shift in the standings points to growth in three important markets:
The direct channel — which includes walk-ins, telephone, and website bookings — continues to hold its ground. According to Cloudbeds’ 2025 State of Independent Lodging Report, OTAs accounted for 61% of bookings for independent properties worldwide in 2024 — a small but telling increase from the previous year.
So far in 2025, the balance between direct and OTA bookings hasn’t dramatically shifted. Yet the ground beneath this balance is beginning to move. As travelers increasingly turn to AI-powered search platforms like ChatGPT, Google’s AI Overviews, and Perplexity for trip planning, hotels risk losing visibility where it matters most — at the start of the booking journey.
Recent partnerships underscore this shift: Tripadvisor’s tie-up with Perplexity and the integration of major OTAs like Booking.com and Expedia into ChatGPT’s app ecosystem mark a new phase in how travelers will discover and book stays. In this emerging landscape, AI platforms will funnel traffic and revenue toward OTAs instead of hotel websites.
For many lodging operators, performance has lagged expectations this year as pricing power softened and demand cooled. Adjusted for inflation, “real ADR” has actually declined for many properties.
After years of strong rate growth, travelers are becoming more price-sensitive, particularly in the economy and midscale segments. Across our data set, average daily rates (ADR) rose modestly on Expedia and Booking.com bookings but dropped 10% on Vrbo, 5% on Hotelbeds, and 2% on Airbnb.
With global inflation softening but still projected to average 3.2% in 2026 (OECD), operators will need to work even harder to prevent rate erosion.
More concerning, however, is that occupancy remains flat for many hotels. According to STR’s Global Hotel Performance tracker, global revenue per available room (RevPAR) rose 2.8% year to date (August 2025), but it was driven mainly by rate, not volume. Regional trends vary sharply, with strong growth in the Middle East & Africa, Australia, Japan, and Latin America, but declines in China, France, Germany, Mexico, and the U.S.
With softer demand and rising rate sensitivity, pricing strategy will be critical heading into 2026. A revenue management system (RMS) can help by tracking demand shifts and automating price updates, ensuring properties stay competitive and profitable even when the market wobbles.
Our data shows a consistent downward trend in average length of stay (ALOS), which declined every month from January to July 2025 compared with 2024.
Why are travelers taking shorter trips? A few factors may be at play:
Longer stays are typically more profitable due to lower operational costs, reduced acquisition costs, and steadier revenue. Hotels can buck the trend toward shorter stays by:
In our data set of Cloudbeds-connected properties, Airbnb’s ADR fell by 2.0% this year, ALOS by 3.4%, and room nights grew just 4.1%. Vrbo, meanwhile, increased ALOS by 12.6%.
While these figures reflect booking patterns among independent properties using Cloudbeds, they may not represent Airbnb’s overall platform performance. However, the trends may help explain CEO Brian Chesky’s August announcement that Airbnb plans to expand “significantly more aggressively into hotels”.
In any case, the company remains a formidable player, with ambitious plans to expand the site into an Amazon-like “everything platform” spanning vacation rentals, homes, services, and experiences. For properties not yet listed, now might be the time to reconsider.
The big brands were as much real estate companies as hospitality brands. To these companies, real estate was a steady, predictable, and safe business, with modest upside potential.
Now that we’ve looked at booking trends, what about the bottom line? The team analyzed financial data from tens of thousands of hotels worldwide over the same period (January–July 2025 vs. 2024). Below are highlights of key performance metrics across regions.
|
YTD Flex/Flow |
Flex/Flow |
|
|
LATAM |
38.9% |
Flow |
|
NOAM |
23.8% |
Flow |
|
APAC |
33.1% |
Flow |
|
Europe |
34.4% |
Flow |
Revenue growth is great, but what really matters is how much of it “flows” through to profit. To measure this, we calculated Flex vs. Flow rates — also known as profit conversion rates — by dividing the change in profit by the change in total revenue.
Sounds confusing? Here’s how it works:
All four regions achieved positive flow this year, meaning hotels converted a healthy share of new revenue into profit.
While RevPAR remains a hotel’s go-to metric, total revenue per available room (TRevPAR) gives a fuller picture because it includes all income sources — from rooms and food and beverage (F&B) to spa, golf, and parking.
For full-service properties, TRevPAR is a true indicator of how effectively hotels are monetizing every revenue outlet, not just rooms. The results:
To better understand what’s driving TRevPAR growth, we looked at three major sources of ancillary revenue: F&B, golf, and health club/spa.
While F&B remains the primary driver of ancillary revenue worldwide, the wide regional spread across all revenue streams suggests untapped potential to capture more guest spend.
Of course, higher revenue means little if costs outpace it. Labor remains the largest expense for hotels, and it’s still climbing.
With labor expenses taking a large share of budgets, profitability gains now depend as much on cost discipline as on revenue growth.
When we subtract operating costs from total revenue, we get gross operating profit per available room (GOPPAR) — arguably the most meaningful indicator of a hotel’s financial health.
All regions saw GOPPAR increase YoY, although performance varied from month to month:
Interestingly, GOPPAR peaked in January but dropped in June and July, suggesting that while summer months brought higher revenue, profit conversion lagged due to increased labor and variable costs.
In recent years, record ADRs masked rising costs. With demand softening, profit management takes center stage. Here are three key priorities:
Hoteliers are hoping for stronger demand and greater stability in 2026, but challenges remain, from trade tensions and a weakened U.S. dollar to questions about an “AI bubble.”
As IMF Managing Director Kristalina Georgieva recently said in her October 2025 Global Economic Outlook address, “Uncertainty is the new normal.” Still, the IMF projects global GDP growth of 3.1% next year, a slight improvement over 2025.
Despite the turbulence, hotels have shown resilience, improving efficiency, and turning more revenue into profit. With the right strategies, teams, and tech, they can carry that momentum into 2026.
Duetto and Cloudbeds will continue to track global hotel performance and share further insights and success stories in future reports.
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Disclaimer: This report contains forward-looking statements and projections based on current market conditions and historical data. Actual results may differ materially due to various factors including economic conditions, regulatory changes, and unforeseen events. The data and analysis presented reflect performance among properties using Cloudbeds and Duetto systems and may not be representative of the broader hospitality industry. This report is provided for informational purposes only and should not be considered financial, legal, or business advice.