The Visitor Has Left the Lobby

New week, new theory: Hotels didn't lose the leisure traveler; they just stopped fighting for her.

The hotel industry would very much like you not to notice this.

Here's what the data says.

• STRs now capture 13.4% of all U.S. lodging demand.

• That number was 12.1% in 2019.

• Nationally, they overtook hotels for one brief moment in Sept '25

• Several non-convention markets saw upwards of 30% STR bookings.

It doesn't sound catastrophic until you zoom in on where the share is going: leisure destinations, family travel, groups, longer stays, rural markets. Exactly the travelers' hotels spent decades building their brands around.

• Hotel occupancy ended 2025 at 63.38%.

• Still below 2019.

RevPAR growth for the year came in at 0.1%. Not a typo. One tenth of one percent. TSA throughput was robust, often exceeding pre-pandemic levels. People were traveling. They just weren't sleeping in hotel rooms at the rate they used to.

So what did the hotel industry do?

It called meetings.

• Meetings and event bookings were up 28% in 2024.

• Hyatt reported group and business transient as its single biggest year-over-year growth driver.

• Smart Meetings noted, and I want you to sit with the phrasing here, that "a weaker leisure could be good news for meeting planners" because it would free up room stock and create more competitive pricing.

"A. weaker. leisure."

That sentence did a lot of work and nobody flinched.

The leisure traveler evolved.

She started valuing space over standardization. A kitchen over a continental breakfast. A neighborhood over a lobby bar. An experience that felt like somewhere instead of anywhere.

The hotel industry looked at that evolution and made a strategic calculation: we can't win that game, so we'll play a different one.

She didn't leave because hotels were bad. She left because someone else was better at speaking her language. And instead of learning the language, the hotel industry decided to talk to a different audience.

That is a legitimate business decision.

It also has consequences nobody is fully accounting for.

The meetings strategy works in certain markets.

Urban convention centers. Airport adjacents. Big box properties with 40,000 square feet of breakout space and a dedicated events team. Those hotels are fine. Some of them are thriving.

The leisure destination hotel does not have that option. The one in the mountain town, the coastal market, the wine country corridor, the lake district. Her entire value proposition was built around the traveler who chose her because of where she is, not what she offers in a conference package.

And that traveler is in the STR down the road. With a fireplace and a back porch and a host who left a handwritten note about the best hiking trail.

The leisure destination hotel is now competing on feeling. And right now, she is losing that competition in markets all over this country.

The STR ecosystem has its own set of problems nobody wants to talk about honestly.

• Supply grew 6.1% in June 2025.

• Average occupancy dipped to 50%.

The hosts who got in early, priced smart, and built a genuine experience are doing fine. The hosts who bought a condo in 2022 because someone told them passive income was a personality are having a harder year.

The STR market is not a monolith. It never was. It runs from the host who has been welcoming guests for a decade and knows every trail within 20 miles, to the investment property with stock photos and an automated check-in code that stops working on Friday afternoons.

The leisure traveler can tell the difference. She is getting better at it every year.

Which means the STR market is going to bifurcate further. The quality end wins. The commodity end commoditizes. And the hotels who thought they were competing against Airbnb broadly were actually only competing against the good half of it.

So, here we are.

Hotels chasing meetings. STRs sorting themselves into winners and everyone else. Somewhere in the middle, the leisure traveler who drives visitation numbers, fills restaurants on Tuesday nights, and shows up in the shoulder season because she actually wants to be there is looking for someone to fight for her.

The destinations that understand this moment are not picking sides. They are not pro-hotel or pro-STR. They are pro-visitor. The leisure traveler's lodging choice is not the destination's problem to solve. It is the destination's opportunity to understand.

She chose the STR. Is she welcomed when she arrives? Does she know where to eat? Does anyone help her feel like she belongs here, or does she navigate the destination with an app and a hope?

She chose the hotel. Does that hotel understand it is now primarily serving a meetings audience and has quietly de-prioritized the leisure experience? Is she getting the welcome she came for, or is she eating rubber chicken next to a breakout session on Q3 projections?

The lodging choice changed. The visitor's need did not.

She still wants to feel like she made the right call. Like someone was expecting her. Like this place was worth the drive.

That job does not live in a property type.

It lives in the people. The hosts. The front desk. The visitor center staff. The locals who care enough to tell a stranger about the good waterfall.

Hotels can chase meetings. STRs can sort themselves out.

The destination that figures out how to serve the leisure traveler regardless of where she sleeps wins the next decade. And ofc, the STRs need a fair seat at the table for her options.

Jenn Barbee is the Co-founder of Destination Innovate and America's Most Independent Voice in Tourism. She writes Barbee v Tourism because somebody has to. Join her revolutionary working lab on STR<>DMO alignment: Hosts & Home Teams