In a year defined by uncertainty, what do hoteliers have to be grateful for? A handful of hospitality professionals cited their hard-working teams, the resilient and collaborative nature of the industry, emerging technology and more on a recent episode of the CoStar News Hotels Podcast.
To set the scene for the episode, Didio Pequeno, director of hospitality market analytics in the Northeast and Midwestern regions at CoStar, shared an overview of U.S. hotel performance for the year so far. Pequeno noted that revenue per available room is flat for the year and average daily rate has tempered as well.
"The year did start off strongly in January, but we've seen hotel metrics sort of trend downwards since then. Year over year, occupancy has declined for seven consecutive months," Pequeno said. "ADR growth has also slowed considerably, and it's been down to the past three months."
Last week, STR released its downgraded forecast for 2025 and 2026. Pequeno said the new forecast is reasonable, considering all the macroeconomic headwinds the industry is facing.
"Through the end of the year, we're now anticipating that RevPAR will decline 0.4% due to a continued decline in occupancy," he said of the new forecast. "So, the same issues that the country has dealt with through the past 10 months, they're expected to continue through November and December — economic uncertainty, decline in consumer sentiment, increasing inflation, increasing unemployment and, of course, everyone's favorite: tariffs. All of those issues have really dragged down hotel performance, and that's not expected to change anytime soon."
As disappointing as discussing the decline in hotel demand is, hoteliers can find several things to be thankful for this year — like the opportunity artificial intelligence is bringing to the industry and the ability to learn what guests are looking for.
Five hoteliers were interviewed for the podcast and asked what they are thankful for this year. They include:
- Steve Palmer, founder, managing partner and chief vision officer of Indigo Road Hospitality Group.
- Matthew Campbell, chief operating officer and chief legal officer at My Place Hotels of America.
- Kurien Jacob, strategic investor in Hospitality Venture Tech.
- Barbara Purvis, president and founding principal of Essex Hotel Management.
- Mike Everett, executive vice president at CoralTree Hospitality.
For Palmer, he celebrates that hotel guests are becoming hungrier for experiential travel and hospitality, and they are seeking a higher quality of hospitality.
"I think guests are becoming more discerning, and I don't like the term demanding, but I think they expect more. And I think for us, that makes us raise our game up," he said. "So, I'm thankful for a lot. I'm thankful that the interest in independent boutique hotels continues to rise."
Hotel workers — both on property and in corporate offices — have had a lot to contend with this year, Everett said. The decline in hotel performance and uncertainty is taking a toll on everyone, so just clocking in can be a challenge.
“This year, what we have to be thankful for are the teams that are showing up each and every day at our properties, that are at our home office, in a time where there's so many headwinds," Everett said.
From the front-desk team to catering and banquet employees, "they're doing the hard work, and we should be thankful for that,” he added.
Hear more for Pequeno and each of the interviewed hoteliers by listening to the podcast embedded above.