2025 Economic Forecast for the Outdoor Hospitality Industry; A review of industry & economic trends

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Our managing broker, Bob Kaplan, presented an Economic Forecast for the Outdoor Hospitality Industry at the Outdoor Hospitality Conference & Expo (OHCE) 2025 conference. This presentation explores key trends, opportunities and insights for RV park and campground stakeholders.

1. Operating Environment

  • The outdoor hospitality industry experienced a “COVID bump” from 2020-2022, with increased occupancy, RevPar, and ADR, but metrics have now returned to pre-COVID levels.
  • 2023-2024 saw lower occupancy and income, while 2025 shows mixed results across properties. ​
  • Transient business is declining, while seasonal and long-term stays are stable or increasing. ​

2. The Economy

  • Total employment shows moderate growth, and the U.S. economy continues to grow, with a 3.8% year-over-year real GDP growth in Q2 2025.
  • Inflation remains above the target rate of 2%, impacted by tariffs. ​
  • Wage growth is moderate, but personal savings rates are low at 4.6%, below the 20-year average. ​
  • The stock market is experiencing a rally, led by the “Magnificent 7” tech companies. ​

3. Hospitality & Leisure Industry Trends ​

  • RV shipments have increased for the second consecutive year, with total shipments up 4.2% year-over-year in 2025.
  • Long-distance travel has rebounded to pre-pandemic levels and is projected to grow over the next 15 years. ​
  • Hotel occupancy and RevPar are showing signs of weakness in 2025, particularly in mid-level and economy hotels. ​

4. Debt Market

  • 10-year Treasury bond rates are below the 40-year average but above the 10-year average. ​
  • The Federal Reserve is expected to continue lowering rates to support the labor market, with a 0.25% rate cut in October 2025.
  • U.S. government debt as a percentage of GDP is at historically high levels, exerting upward pressure on interest rates. ​

5. Commercial Real Estate Market ​

  • Cap rates are expected to decompress as interest rates decrease, but dry powder will keep spreads low. ​
  • Real estate investment volume is expected to benefit from lower borrowing costs and stronger economic activity. ​
  • Hospitality investment sentiment is mixed, with cautious optimism and a more balanced market between buyers and sellers. ​

6. Conclusions

  • The operating environment remains challenging, with compressed margins and varied results in 2025. ​
  • Travel demand is holding up, but mid-level and economy sectors are declining, while glamping remains strong. ​
  • Interest rates are down but not expected to return to 2020-2022 levels. ​
  • The economy shows resilience despite challenges like inflation, housing affordability, and a stressed middle class. ​