Washington, D.C. Hospitality Market Report

Policy shifts temper booking momentum. Following a strong 2024, hotel performance in Washington, D.C., may moderate this year amid policy uncertainty and sluggish leisure travel. Federal headcount reductions and office lease terminations could dampen conference activity and midweek business demand, particularly in the CBD. A halt on non-essential travel due to a new approval system may further suppress per diem-related stays. Even so, private-sector bookings should prove more resilient as industry trade groups and contractors engage with the new administration. Suburban areas with less exposure to federal travel will likely face fewer disruptions. Return-to-office mandates should also encourage transient business travel and in-person meetings. That said, while these factors may sustain higher-end hotel demand, ongoing financial strain will likely still limit travel outlays among budget-conscious consumers. These crosscurrents are set to slow occupancy gains, though affluent visitors should continue to drive ADR growth at upscale properties.