2025 would have perplexed Charles Dickens. While the year began with great expectations, in the end, it was neither the best of times nor the worst.
The members of the Hospitality Asset Managers Association (HAMA), led by Membership Chair Emily Miller, Atrium Holding Company, CHAM; Education Chair John Paulsen, hotelAVE, CHAM; 2025 President Chad Sorensen, CHMWarnick, CHAM; and At-Large Board Member Sean Kreiman, CHMWarnick, recently sat down to have a closed-door discussion on what went right, what could have gone better and what 2026 might have in store.
As 2025 kicked off, hopes were high, with prognosticators predicting modest revenue per available room growth of approximately 2%. Instead, the year ended on a down note, posting a national decline of 0.4%, the first such occurrence since 2020. “
It was the year the music stopped," Paulsen said. "Demand progressively softened as the year progressed, led by such factors as decreased inbound international travel, natural disasters and economic uncertainty.
This is not to say 2025 was all doom and gloom. As with most things in the hospitality industry, “location, location, location” played a major role in one’s fortunes. Markets like Seattle, San Francisco and New York experienced stronger-than-expected recoveries, with areas with return-to-office mandates enjoying the strongest upticks.
“Gateway cities recovered faster, especially where offices filled back up,” Kreiman said. Certain leisure markets, such as Orlando with the Universal Epic Universe expansion, also had a better time of things. The takeaway from all these bright spots seems simple in hindsight: Intimately knowing one’s local market and how to position one’s hotel was more important than ever.
While GOP margins declined more than expected, labor was something of a bright spot, or, at least, not as bad as it had been recently. Hourly wages appear to have stabilized and become a bit more predictable. Employee turnover rates are holding, if not falling, for most property-level positions, though property leadership roles remain harder to fill, as many workers left hospitality for other industries during the pandemic.
The acquisition market remained stubbornly tight, with most owners opting instead to deploy funds to address existing properties with projects that could demonstrate a clear ROI. Energy initiatives like adding solar panels remained popular, driven by rising electricity costs and regulatory pressure. Insourcing otherwise third-party services, from valet parking to in-house laundry, also became more attractive as owners and operators sought to keep prices in check.
Fortunately, the brands remained strong partners as the industry dipped. Members agreed that the brands demonstrated flexibility and a collaborative spirit, though that seemed to be conditional upon strong guest scores and good, personal relationships. “Guest satisfaction scores are now the biggest lever with brands,” Miller said.
An “if it ain’t broke, don’t fix it” mentality seemed to rise to the fore. When property improvement plans and other cash infusions were necessary, the lending environment was supportive of projects that were brand-compliant and demonstrated a strong ROI.
As Paulsen also noted, “Leisure demand couldn’t replace business travel indefinitely,” and 2025 was the year that leisure travel stopped compensating for weak weekday travel. With personal finances becoming another growing concern, the “bleisure” phenomenon of business travelers lengthening stays for personal enjoyment has disappeared, with some members questioning whether it ever truly existed in the first place.
If many are predicting flat or negative growth in 2026, what does “success” look like for the upcoming year? For some asset managers, that means meeting or beating budgets while maintaining margins through productivity. Others point to capturing upside from such major events as the World Cup and Super Bowl, taking advantage of group pace and forward booking. HAMA members are shading their optimism with realism — 2026 looks to present operational challenges, but there are bright spots as well. “Success in 2026 isn’t about growth—it’s about execution and margins,” Sorensen concluded.
What "Twist" will 2026 hold? Are "Hard Times" ahead? Or will "The Money" start flowing again? Time will tell, but here’s hoping for "His Wonderful End."
Sean Kreiman is a Senior Vice President at CHMWarnick, the leading hotel asset management and owner advisory firm, with $15 billion in client investments under management and $2 billion in hospitality projects under development.
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