Analysts offered a mildly optimistic outlook for the lodging industry at the Americas Lodging and Investment Summit
Feb 3, 2025
While the hotel industry shows signs of moderate growth, cost control and political stability will be key factors. CEOs are cautiously optimistic, but remain wary of potential disruptions from unpredictable politics.
Key takeaways
- Modest corporate travel growth expected: Corporate travel demand will see modest improvements, but not significant growth, according to Ryan Meliker of Lodging Analytics. Growth will be constrained by declining corporate profits and a slower stock market, partially offset by more employees returning to the office;
- RevPAR and rate increases with rising costs: STR projects a 1.6% increase in U.S. average daily rates and a 1.8% increase in RevPAR in 2025, driven by luxury and upper-upscale hotels. Cindy Estis Green of Kalibri Labs is slightly more optimistic, predicting RevPAR growth of 1% to 3%, but warns of rising hotel expenses (up 5% to 10%). Controlling costs and managing distribution costs (between brand websites and OTAs) are critical to profitability;
- Optimism under a Trump administration: Hilton CEO Christopher Nassetta and Wyndham CEO Geoffrey Ballotti are optimistic that clearer regulatory policies and tax reform will boost business travel. They point to improved government-business engagement compared to the Biden administration;
- Concerns about unpredictable policy: Executives, including Marriott CEO Anthony Capuano, warn that potential travel bans or tariff-related disruptions could hinder growth. Policies that increase friction in cross-border travel could reverse the progress made in recent years;
- Group travel and segment performance: Demand for group travel is expected to grow 5% year-over-year in 2025. Luxury and upper upscale hotels will see stable growth, while midscale hotels will face challenges from supply growth, and economy hotels benefit from low supply and high demand.
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