An analysis from Kalibri Labs shows that changes in federal funding and economic uncertainty negatively affect the U.S. hotel industry, particularly in the government and corporate travel sectors.

Kalibri Labs, a leading intelligence platform in the hospitality industry, has released a comprehensive analysis indicating that changes in federal funding and economic volatility negatively impact the U.S. hotel industry. The white paper, “Navigating Market Turbulence: The Impact of Federal Policy Changes on U.S. Hotel Performance and Demand Outlook”, analyzes data from more than 35,000 hotels and highlights how federal policy decisions impact travel segments and regional markets.

According to the findings covering performance trends from January 2024 to early April 2025, the U.S. hotel market has shown mixed performance. Out of 334 U.S. markets, 53% (177) experienced year-to-date (YTD) declines of up to -22%, while the remaining 47% (157) remained flat or improved. The total U.S. room night volume has decreased by 1% year-over-year, with future bookings pacing 4% below 2024 levels.

Government travel has significantly declined, with 76% of the 334 U.S. markets reporting YTD declines in government per-diem transient room nights. Total U.S. government per-diem transient bookings are down 9% YTD, with future bookings trailing 20% below 2024 levels.

The Washington, D.C. area, comprising D.C., Maryland, and Virginia, reflects the impact of policy changes, with a -20% YTD drop in government per-diem bookings and a -44% decline in 30-day future government per-diem bookings as of April 4, 2025.

Cindy Estis Green, Co-Founder & CEO of Kalibri Labs, explained that federal policy reshapes travel patterns that directly affect business planning and hotel profitability. She emphasized the need for commercial teams to have a detailed, real-time view of demand to navigate the evolving landscape. She added that precise targeting, rather than broad targeting, will define today’s hospitality market winners.

Looking ahead, with disparities in chain class widening and core segments such as corporate and government travel softening, hotel stakeholders need to reassess their assumptions about demand resilience and profitability. Kalibri’s report offers a detailed guide by market, segment, and rate category, with updates available both weekly and through monthly publications.

This new analysis underscores the importance of understanding and adapting to evolving market conditions for the U.S. hotel industry, particularly in light of the ongoing impact of federal policy changes. As the situation continues to unfold, it is clear that strategic decision-making and effective management will be vital to navigating this period of turbulence and safeguarding long-term success in the industry.