Data Courtesy of CoStarâ„¢
Los Angeles remains one of the nation's top-performing hotel markets by absolute rate and occupancy, although performance has cooled from the more robust trajectory seen earlier in 2025. Over the trailing 12 months through April 2026, RevPAR edged modestly lower, changing by -0.5%, underscoring a period of normalization rather than signaling a structural erosion in demand fundamentals Recent results reflect a market working through volatility after an unusually eventful prior year.
Short-term distortions played an outsized role in shaping early-2025 performance. Wildfire-related displacement in January temporarily lifted occupancy across a wide cross-section of hotels, particularly during the midweek period. As leisure transient demand faded, operating trends softened, with the deceleration most apparent through the summer months. Occupancy generally held within a relatively narrow band during peak leisure travel periods; however, ADR momentum weakened meaningfully, and late-summer rate pullbacks weighed on overall RevPAR growth. This pattern points to increased price sensitivity among leisure travelers and heightened competition for discretionary travel spend.
Conditions began to firm toward year-end and into early 2026. While January contended with difficult year-over-year comparisons following the prior year's displacement-driven surge, results proved more resilient than expected. February marked a clearer inflection, supported by the NBA All‑Star Game, which delivered a temporary lift to both occupancy and pricing and translated into stronger RevPAR performance relative to recent months. This positive trend extended into March, driven by a favorable holiday calendar.
12 Mo Occupancy
12 Mo ADR
12 Mo RevPAR
12 Mo Supply
12 Mo Demand
Leisure demand continues to anchor the market, benefiting from Los Angeles' global appeal and diversified visitor mix. At the same time, consumers have become more value-conscious, limiting operators' ability to push rates, particularly during peak periods. Corporate and international travel remain below prior-cycle levels, contributing to softer weekday fundamentals and a less uniform recovery profile across segments.
Looking ahead, Los Angeles stands to benefit from a robust slate of global events, including the FIFA World Cup, the Super Bowl, and the Olympic Games, which should drive episodic demand compression and support ADR growth during peak periods, with RevPAR gains generally clustering near the 5% range. Outside of these periods, near-term performance will remain sensitive to broader economic conditions and the pace of international demand recovery. Despite positive early-year results, downside risks to the forecast remain elevated, as weakening consumer sentiment, driven by heightened macroeconomic and geopolitical uncertainty, continues to pose a risk to domestic leisure travel demand.
Supply growth remains disciplined. Approximately 2,000 rooms across 17 projects are under construction, representing a roughly 1.7% inventory increase through 2028. This pace is consistent with recent delivery trends and reflects continued development interest despite elevated construction costs, regulatory hurdles, and tighter financing conditions.
Transaction activity remains active but measured. The transfer tax implemented in April 2023, commonly referred to as the “Mansion Tax”, adds a 5.5% levy on hotel transactions above $10 million within city limits, materially dampening institutional deal flow. Only a handful of assets above that threshold have traded since enactment, and total sales volume over the past year remains below longer-term norms. Total transaction volume over the past 12 months reached $421 million, aligned to the three-year annual average of $448 million. While Los Angeles continues to attract global investor interest over the long term, near-term conditions are characterized by limited liquidity and constrained pricing discovery.
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