NEW YORK — The global hotel industry is contending with competing narratives of economic challenges paired with resilient travel demand.
During the "View from the boardroom" general session at the NYU International Hospitality Investment Forum, the chief executive officers at global hotel brand companies shared their takes on why they're optimistic about the health of the travel industry in the face of inflationary pressures and geopolitical disruptions.
After coming out of the pandemic, all hotel segments were flying high, with the lower chain scales leading the way, Hilton President and CEO Chris Nassetta said. Now there’s this K-shaped economy with the higher end doing well but the middle and lower segments of business have struggled with inflation.
For the last couple of years, the hotel industry has seen results going backward, and that’s hard for the entire industry but for hotel owners especially, he said.
However, the situation appears to be shifting given the improving results from the fourth quarter of 2025 to the first two quarters of this year, Nassetta said.
“You’re starting to see what I’ve tried to get people to pick up on as more of a C-shaped economy — C for convergence, where the high end is still doing well, you’re starting to see the mid-chain-scale segments and even the lower chain-scale segments come up,” he said.
That’s being driven by a business-friendly environment, a tax-friendly environment, deregulation and a massive investment cycle, Nassetta said. That investment includes artificial intelligence and the hyperscalers spending on data centers and the infrastructure necessary to support them. There was also the $1.4 trillion infrastructure bill and the $800 billion CHIPS Act passed years ago that are having impacts now.
“It’s very stimulative,” he said. “It just takes a long time to work its way into the economy.”
Hyatt Hotels Corp. is smaller than the other companies represented on stage, and it doesn’t have as large a presence in the midscale space, President and CEO Mark Hoplamazian said. It has a higher concentration with higher-rate hotels and higher household income levels.
In this segment, leisure demand has been persistently “extremely strong,” Hoplamazian added.
“We’ve seen really, really durable demand since the recovery started post-COVID continuing through last year into this year so that over 50% of our revenues now are in leisure,” he said, adding that before the pre-pandemic — a period before the company made several acquisitions — that figure was about 35%.
That increase over recent years is not the result of serving fewer business travelers, Hoplamazian said. That’s just the growth Hyatt has seen in leisure revenue.
Hyatt is trying to grow further into the upper-midscale hotel segment because it wants to expand to adjacent segments, not jump to economy or lower midscale, he said. This approach keeps the continuity of the guest base with one contiguous set of offerings.
Last year, the U.S. was flat, China’s hotel demand hadn’t recovered yet but Europe, the Middle East and Southeast Asia were strong. As a result, IHG Hotels & Resorts had a good year, CEO Elie Maalouf said. Now, the U.S. is strong, China is positive again, Europe is good, Southeast Asia is strong but the Middle East is down because of the U.S.-Iran war. The Middle East doesn’t make up a large share of IHG’s portfolio, so the loss in travel demand is manageable.
Every year there’s going to be something that causes disruption, Maalouf said, specifically calling out the war in Ukraine, U.S. tariffs and others. There will likely be more disruption next year.
“If you have a globally diversified business in a geographic brand sense, you're going to be able to absorb it and move on,” he said.
The demand issue in the Middle East is in recovery now, Maalouf said, recalling a trip to the region he took 10 days ago.
“Honestly, if I didn't bring up the conflict with people there, they weren't talking about it,” he said. “The area is moving on.”
The global hotel industry has the ability to navigate and adapt to disruptions as they come up, said Sébastien Bazin, group chairman and CEO of Accor. Even with its exposure to the Middle East, Accor will likely meet its projections for 2026. Along with cutting some costs, the company also saw travelers who otherwise might have gone to its brands in Dubai or Abu Dhabi instead went to Egypt and Morocco, where Accor has a presence as well.
“I’m only missing one half of those I’ve lost, and in a year I’m probably going to get another probably 25% of those I’ve lost to other destinations of Accor because of the loyalty system, because of the brand attractiveness,” he said.
People still want to travel, Bazin said. They’ll just change the destination instead of canceling their trips.
Leisure travelers and business travelers, particularly those at small- and medium-sized businesses, are still finding ways to address their needs, Nassetta said. They may pivot out of airlines to drive to their destinations because even though gas is more expensive, it costs less than flying.
Prior to the war in the Middle East, there were signs the middle-class consumer was doing better, Bazin said. A lot of the investment spending would be benefiting them. The investors in data centers aren’t the ones actually digging the ditches and building the power facilities and other infrastructure necessary for them. That’s being done by the middle class.
“As that investment cycle continues, it isn’t just hyperscalers and the tech investors that are in the game,” he said. “They can’t be in the game without the middle class.”
A real middle class starts real wage growth, which is how an economy gets going, Bazin said.
There’s a lot of focus on technology companies spending initial capital, but on the other end, there are companies such as Caterpillar that have seen their market caps increase due to demand, Maalouf said.
“They are sold out as long as you can see,” he said.
Spending on artificial intelligence is much broader than people realize, Maalouf said. New York-based technology company Corning has been around for generations and has seen its valuation significantly increase over the last year because companies need more fiber optic cables.
The middle class in the U.S. is bigger than people think, he said, adding that roughly 60% of households own stock, and over 60% own their homes.
“As long as the stock market keeps going, as long as home prices keep increasing, even if you're not getting those increases in your paycheck, you're feeling wealthy,” he said.
Europe is by and large a subsidized economy, Bazin said. That means it will end up with -2% or -2.5% gross domestic product growth, even if everything crashes, because roughly half of the GDP is in the hands of state and public offices, including the health system. If things go well, it will be up 2.5%, but never 5%.
For the last 50 years of available data, numbers show half of the world’s population when traveling ends up in Europe, Bazin said. If 1.5 billion people travel, 750 million go to Europe. They go to Rome, to London, to Paris and Saint Tropez.
The world adds another 500 million people every 18 months, so there will be another 2.5 billion people within seven years, he said. That means that 1.5 billion people traveling become 2.5 billion traveling, which means an extra 250 million headed to Europe, and those aforementioned cities don’t have that much more capacity.
“So for us, being so exposed to France and to Europe, even without doing anything smart, you’re now going to be the recipient of so many travelers,” he said. “What we need to do is, can we keep them longer? Because they’re coming. Can you get them to stay another day?”