LOS ANGELES — The U.S. hotel industry is chugging along with a generally brighter outlook as executives and dealmakers meet at this year's Americas Lodging Investment Summit.
Through meetings, interviews and panel discussions, hotel executives spoke about how they're building on the momentum from 2024 to take advantage of the opportunities that 2025 presents, including potential corporate tax cuts, a more business-friendly regulatory environment and a narrowing of the bid-ask gap.
That said, hospitality executives aware of the obstacles that remain, such as overall higher costs with thinning profit margins, a possibly tighter labor market and lessened pricing power.
Photo of the day
Slide of the day
Data point of the day
Revenue per available room in the U.S. reached 1.8% growth in 2024 over 2023, and CoStar and Tourism Economics forecast the same growth in 2025. The firms’ latest forecast revision, released Tuesday at ALIS, calls for average daily rate to grow 1.6% in 2025, similar to the 1.7% growth achieved in 2024.
Quotes of the day
“We’re in the ‘open for business’ messaging as we speak. We do sentiment surveys all the time, and people in the U.S. thought 30% to 40% of Los Angeles burned to the ground. It was 2% affected.”
— Caroline Beteta, president and CEO of Visit California, said her agency is active correcting misconceptions about the impact this month’s LA-area wildfires have on tourism business in the state.
“I have a request. Can we motivate Taylor Swift to go on another tour?”
— David Duncan, president and CEO of First Hospitality, said during the Lodging Industry Investment Council meeting at ALIS that hotel operators were spoiled by the business generated by Taylor Swift’s Eras Tour.
“We have this mega-decade of opportunity in front of us that is absolutely massive, and we’re sending a message to the world that we don’t want your illegal visitors and we may not want your legal ones either.”
— Geoff Freeman, president and CEO of the U.S. Travel Association, said during the Travel & Tourism Outlook that large events such as the 2026 World Cup and 2028 Summer Olympics are large and growing travel drivers to the United States. He said current tensions around immigration and border security have the potential to limit inbound travelers.
“We don’t need to take seats away. We need to add seats to the table.”
— Thomas Penny, president of Donohoe Hospitality, on the Forward @ALIS panel, speaking about how to bring additional perspectives to the hotel industry that will lead to more problem-solving.
Editors' takeaways
Throughout the day, I heard a lot of talk about what impact the tougher stance on immigration and the handling of illegal immigrants may have on hotel operations. Some hoteliers said they're already dealing with the effects to a degree, mostly through contract labor and having to make plans for if employees stop showing up for work out of fear of Immigration and Customs Enforcement raids. Others said they haven't seen any changes yet but that they expected they still might at some point this year.
No one knows exactly how it will play out, but any hotelier not keeping an eye on this is asking to be caught off guard when their property is suddenly short-staffed, has to pay higher wages to bring on new staff, has delays in deliveries or finds food even more expensive than before. It won't necessarily be an across-the-board effect as there will be areas affected more than others, but that doesn't mean it won't still hurt.
— Bryan Wroten, senior reporter
@HNN_Bryan
There are several very real headwinds the hotel industry faces to start off 2025, not the least of which is a continued tight labor environment and cost creep eroding the profitability of the overall business, but that's not enough to rain on hoteliers' parades to kick off the new year.
These were problems in 2024 and 2023 to varying — often more significant — degrees, but the general belief at the first day of ALIS is the good will outweigh the bad this year. If the transactions environment finally opens up in a way that many hope it will and the broader economy improves over the course of the year that consumers are feeling particularly confident heading into the summer travel season, those concerns will seem minor in retrospect, for sure.
Interestingly, this is the first year in my recollection where I've heard from multiple people openly acknowledging the industry's broad habit of starting off a year with a sense of optimism, only to have to scale back their hopes as the year progresses — such as was seen in 2023 and 2024. But those same people who recognize that pattern seem to believe this year will be demonstrably different. Only time will tell if they're right.
— Sean McCracken, news editor
@HNN_Sean
This conference is the one where the U.S. hotel industry creates its vision board, so to speak. Executives are typically optimistic, and this year is no exception. I heard a lot of optimism today about hotel transaction volume finally picking up this year for a number of reasons. First, debt markets are opening up. Private equity has money, those companies are not waiting for distressed hotel assets to materialize anymore. The bid-ask gap is narrowing, according to hotel owners in the Lodging Industry Investment Council, and more clarity into where interest rates are headed means it’s getting easier to bring a hotel deal together. JLL’s Hotel & Hospitality Group released its Global Hotels Investor Sentiment Survey, and that firm projects more portfolio sales this year and generally higher investor confidence. It’s also becoming abundantly clear that hotel owners can’t avoid renovations any longer, meaning it’s past time to either invest or sell.
— Stephanie Ricca, editorial director
@HNN_Steph
Editor’s note: Chris Nassetta serves on the board of directors for Hotel News Now’s parent company, CoStar Group.
(Corrected on Jan. 29 to use First Hospitality's correct company name in the Quotes of the day section.)