Advice from Barry Sternlicht, lower-than-expected demand top hotel headlines of the year

What will be the legacy of 2025 in the hotel industry?

Perhaps it will be demand and revenue per available room slightly decreasing year over year, or maybe it'll be the strength of the luxury segment. Maybe it will be the uncertainty mixed into the economy by the introduction of tariffs, or it'll be the decrease in travel to the U.S. from its Canadian neighbors.

Below is a list of the most-read CoStar News Hotels stories from 2025.

Starwood Capital Group Chairman and CEO Barry Sternlicht received the Jonathan Tisch Active Citizenship Award at this year's NYU International Hospitality Investment Forum. In his acceptance of the award, Sternlicht said the hotel business isn't a difficult one to succeed in, but that success can only be achieved with a certain level of passion, CoStar News Hotels Sean McCracken reported.

"If you like people, be in this industry. If you don't, go code in a garage in Mongolia," he said. "This is a fun business, and it should be fun. If you're not having fun, you shouldn't be in the business."

There were signs early on in the year that hotel demand wasn't as strong as it was expected to be.

At the Hunter Hotel Investment Conference back in March, Jan Freitag, national director of hospitality analytics at CoStar Group, said that U.S. hotel demand wasn't as strong as it looked. Certain top 25 markets were propping up the overall total across the country, but there was softness past that.

"Unfortunately that, I think, is going to be the tenor for the remainder of the year," Freitag said on the "Key Statistics Shaping Hospitality in 2025" panel at the Hunter Hotel Investment Conference. "We are going to see a top line that looks pretty good, but then you have to un-layer it and say, 'Oh, underlying that is maybe not as strong of a hotel industry as we'd like it to be.'"

The hotel transactions market undertook a similar path as hotel demand — initial expectations of positive momentum progressively became more and more subdued.

In June, CoStar News Hotels Bryan Wroten reported that hoteliers felt the pace of deals was slower than they believed it would be, and there were questions about its potential to pick up. The roadblocks in place on the buyer side had nothing to do with a lack of access to capital, said Dustin Fisher, senior vice president of investments at Noble Investment Group.

“It’s purely uncertainty,” he said. “Trade policy, government spending, international travel — you can take your pick.”

In a stunning move that made national headlines, Marriott International ended its 20-year licensing agreement with apartment-hotel brand company Sonder Holdings less than two years into the partnership due to the latter's default.

Marriott immediately removed all of Sonder's properties from its booking channels, which caused guests to have their reservations canceled abruptly in the middle of their stays.

Sonder placed the blame of its default on "severe financial constraints," in part due to challenges integrating its systems into Marriott's platform. Marriott pushed back on these claims, and said in a news release that it "does not agree with the characterizations expressed in Sonder's release."

Under the direction of the Trump administration, the U.S. federal government has intensified its focus on arresting and deporting illegal immigrants and legal immigrants who have lost their protected status.

Many of those immigrants work in the hotel industry, so employers need to be ready for property visits from U.S. Immigration and Customs Enforcement agents and other law enforcement agents, said Jessica Cook, a partner at law firm Fisher Phillips who has a specialty in immigration employment.

“They need to prepare,” Cook said. “The government is laser focused when it comes to immigration compliance right now, and we're going to see the worksite enforcement continue."

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