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The State of the (Dis)Union: Early Q1 Signals and What’s Ahead in 2025

  • Bashar Wali
  • 31 March 2025
  • 2 minute read
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This article was written by a Hotel Marketing Flipboard. Click here to read the original article

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We’re only a few chapters into Q1, but the early pages tell a familiar story: ADR’s inching upwards, occupancy’s stalling, and costs are still throwing elbows. The industry’s clinging to top-line growth headlines, but dig a little deeper and the picture gets murkier.

Yes, we got a solid early lift—Super Bowl, All-Star Weekend, inauguration buzz. But that sugar high won’t last through Q2. RevPAR’s already showing signs of moderation.

Costs? Still rising like they’ve got something to prove. Labor, insurance, utilities—you name it. And that CapEx you’ve been dodging since 2020? It’s aging like milk in July.

Here’s how it’s shaping up so far:

1. Occupancy Is a Slow Grind, Not a Spike Weekends are outperforming. Midweek? Still a work in progress. Corporate travel’s crawling back, group demand’s helping, and bleisure’s doing its best to keep us all sane. But let’s not pretend we’re back to a five-night-a-week business.

2. Rate Is King—But Expectations Are Higher Yes, guests are paying—but they’re demanding more. Not more perks—more purpose. If you’re holding rate without delivering soul, you’re not winning loyalty—you’re renting it.

3. Labor Is the Real Battleground We’re not short-staffed—we’re short-inspired. Throwing dollars at the problem isn’t working. Culture, flexibility, purpose—that’s what keeps people. Cross-training, clustering, tech augmentation? That’s not a strategy—it’s basic survival. We’re not hiring roles anymore—we’re hiring utility players.

Third time’s a charm for Yooma Urban Lodge in London
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Third time’s a charm for Yooma Urban Lodge in London

4. CapEx Has Come Calling Lenders aren’t buying the “next year” speech anymore. Brands aren’t either. And guests? They see it. The renovation you delayed is now twice the cost and half as optional.

5. Transaction Market: Still Warming Up Yes, there’s more interest—but buyers aren’t overpaying, and sellers haven’t fully adjusted. M&A talk is real. New development? Still on ice—unless it’s a unicorn resort with a billionaire on the term sheet.

6. Tech and AI: Still a Sideshow, Not the Show Everyone’s watching AI like it’s the second coming. But tech doesn’t build loyalty—hospitality does. Guests don’t care what platform you use. They care how you make them feel. That’s still our differentiator.

Q2 will be the line in the sand. The early-year tailwinds are fading, and the real operating challenges are stepping up. If you’re not rethinking labor, elevating the guest experience, and finally tackling your CapEx backlog—you’re behind.

This isn’t a downturn—it’s a reckoning. And the winners will be the ones who trade nostalgia for nuance, spreadsheets for soul.

Please click here to access the full original article.

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