2024 was an active year for the hotel industry, and 2025 promises to be noteworthy itself.
Hotel News Now kicked off the new year by cataloguing the various changes the hotel industry has ahead of itself. Here are highlights from that content.
Markets to watch
Several U.S. markets are poised for success in 2025, including Houston, which should benefit from convention center closures in Austin, Dallas and Fort Worth.
“I don’t know how they all got together and decided, ‘Let’s all do this at the same time,' but with all three convention centers undergoing renovations or expansions, you have a positive outcome in Houston as a result,” said Aimbridge Hospitality Executive Vice President of Commercial Allison Handy.
Other markets poised for success include Columbus, Ohio; New York; New Orleans; and Raleigh, North Carolina. On the other hand, experts say both Nashville and Atlanta could face significant headwinds in 2025.
International travel trends
Lagging inbound international travel has been a headwind for the U.S. in recent years, but 2025 can see some steady increases in that area.
Jason Reader, chief operating officer at Remington Hospitality, said his company is seeing strong demand from feeder markets in Europe, Canada and Latin America.
"Those were the strongest areas that we saw that [growth]," he said. "We're continuing to see international travel improve."
Hoteliers are also optimistic that more Indian outbound travel will buoy the broad outlook.
But West Coast markets heavily reliant on travel from Asian countries could continue to struggle. This is problematic in places such as Hawaii, which relies on Japanese travelers.
"The reality is, since 2019 we've seen the yen weaken. There's no real sign that we see that the yen is going to massively improve," said Ben Rafter, president and CEO of Springboard Hospitality. "Hawaii has become more expensive. Taxes are higher; products are higher. I see a scenario whereby Japan never comes back to the levels that it was prior to the pandemic."
Major 2025 events
2025 marks the first time in two years the hotel industry won't have the wind of Taylor Swift's Eras Tour filling its sails, but there are other major events to look forward to, along with some major concert tours.
Coldplay, Ed Sheeran and Oasis are among the big musical acts touring in 2025.
Other major events for the year include sporting events like Super Bowl LIX in New Orleans and the Winter Games in Milan and Cortina d'Ampezzo, Italy.
Labor outlook
The hotel industry is one more year removed from the labor crisis immediately following the COVID-19 pandemic, but hoteliers still face major headwinds in staffing. This is particularly true for remote markets.
"Our destination, leisure resort markets have always been a challenge," said Paul Eckert, executive vice president of operations for Davidson Hospitality Group.
One new challenge in 2025 will be a presidential administration with a more negative outlook on immigration, but hoteliers are hopeful that President Donald Trump will see the value in programs such as H-2B visas.
"I understand the premise of trying to keep Americans employed, but there's just not enough people to fill the roles in the U.S., particularly in the hospitality sector," said Chris Mellone, vice president of operations for Rochester, New York-based Essex Hotel Management.
Lending environment
Peachtree Group Managing Principal and CEO Greg Friedman gave HNN his outlook on the lending environment for hotels, which remains dislocated.
"The regional banks, the community banks, the national banks that used to make up 50% of the hotel lending market ... are still not able to lend at the same levels that they once could," he said.
But opportunity remains for investors looking to new places to fill their capital stack.
"If you're wanting and you're willing to move forward with projects, I think you're going to be able to find the capital in 2025," he said. "If you're able to be somewhat creative, I think you're probably going to find a much more accretive structure."