The biggest challenge of the year for hotel operators was in line with the rest of the broader industry — uncertainty.
Whether it was in reference to sudden increases in the cost of goods or demand coming in lower than expected, one thing is clear: meeting hotel owners' expectations was difficult in 2025.
"The biggest challenges for us throughout the year were ... the inconsistencies and the roller coaster of unknowns," said Kerry Ranson, president of operations and partner at South Carolina-based hotel management and ownership company Raines.
It became hard for hoteliers to predict when success was going to come because the roller coaster veered off the usual path frequently during the year, Ranson said.
"The craziest part is, you'd have some months where traditionally on the books, we were great, pacing looked great, and then out of nowhere, strong months ended up being inconsistent," he said.
On the other hand, Raines said, some months that might have been slow in years past ended up surprising him with solid business.
Gabriel Perez, chief operating officer of lodging at South Carolina-based hotel operator The Indigo Road Hospitality Group, said in years past, the costs associated with opening a hotel or restaurant were fixed in a range that was up or down about 3% to 5%. That is no longer the case.
"Now, operators don't feel that we do have that command of category assurance to say this is what it will cost you if we are able to come up with a reasonable figure," he said.
So, what's changed?
Perez said untimely political decisions, such as the rollout of U.S. tariffs on goods from other nations , led to volatility as it relates to vendors and developers. This has presented challenges on the cost side, as prices are a moving target.
"It is very difficult for us to be within budgets, and it's not because of professional misguidance," he said. "It's because everything is changing in real time. Most of it is changing in real time out of leadership whims that have made things different.
"Although we still are able to get items and products and goods from everywhere, we really don't know the final price unless we write the final check at any given moment."
Richard Jones, executive vice president and chief operating officer at Atlanta-based Hospitality Ventures Management Group, said it's been difficult to drive profitability and create value for hotel owners under the current low-to-zero growth revenue environment. According to the most recent CoStar data, U.S. revenue per available room is projected to be down 0.4% year over year in 2025.
This has been a downward trend throughout the year, Jones said. It's forced operators to get creative when it comes to reducing costs while maintaining the guest experience.
"[It's] been quarter over quarter over quarter — it's just been a gradual decline," he said. "And all the stuff recently with the government shutdown and the effect that had on everything going into what was already a soft and challenging period, that just really put even more pressure on everything for a few weeks there."
Even though U.S. inflation has stayed at a generally normalized rate throughout the year, rising costs and flat RevPAR have put pressure on margins, said Gregg Forde, president and chief operating officer at Florida-based Island Hospitality Management.
Forde said his company has one of the lowest turnover rates in the hospitality industry and his teams are laser-focused on service, but that isn't enough to overcome the extenuating pressures.
"This is ultimately a conversation about operational challenges, but the challenge operationally comes from limiting top line," he said. "Ultimately, at the end of the day, if RevPAR as a whole is flat, no matter how good you are at all those things, the challenges operationally become an impact to the margin."
The other side of the coin
It wasn't all bad for hotel operations in 2025.
Last year, the most pressing concerns on the minds of hotel operators were labor and inflation. While inflation remained a challenge in 2025 and is something to watch in 2026, labor has improved greatly over the past 12 months.
"I think that we're definitely beyond the scarcity of labor, in general. It's better than it's been 12, 24 months ago," Jones said.
Forde said staffing is "one of the least talked about things for us in terms of a challenge" because of where Island Hospitality stands with its retention rate.
"It's talked about because you have to stay on top of it, you have to be proactive, you have to always be working at it, but it's certainly not discussed or treated as a challenge the way it was like three, four years ago from that perspective," he said.
One of the shifts Ranson saw around April and May this year where on-property teams started to move from a tactical approach to a strategic one. Coming out of the pandemic, hotel teams were focused on just getting through each day. Now there's been a shift back to planning for the future, he added.
"We started moving more into a strategic vision. They're back in the saddle," he said. "It was great to see our teams in the summer working on things — for instance, in the holidays for now, where they were working on promoting, 'OK, we're going to do a pop-up Christmas bar at a couple of our hotels.' I can tell you that wasn't happening from '21 to '24."