AUSTIN, Texas — For the second time this year, members of the Hospitality Asset Managers Association ranked demand as their top concern in the association's biannual survey.
In total, 77.8% of respondents ranked demand as one of their top three concerns at the moment, up from 65% in the spring survey released in April.
Chad Sorensen, managing director and CEO of CHMWarnick and president of HAMA, pointed to industry projections for full-year hotel performance repeatedly being reduced by major forecasters as one reason for the drop in confidence.
"Deterioration has continued to happen in their updates, so I think the anticipation is that deterioration will continue, which is concerning especially for" the fourth quarter, he said.
The second-highest concern in the latest version of the survey is the trajectory of hotel room rate growth, with 51.9% of respondents ranking that as a top concern. This speaks to a lack of pricing power in a lower demand environment and the broad expectation among asset managers that rooms revenue will be challenged heading into 2026.
"I think the industry right now is at its highest level of trepidation around maintaining rates or increasing rates," Sorensen said. "This is probably the most concern we've had had around rate, and there's been a meaningful shift in the last 90 days."
No other specific issue rose above 50% on the survey, and tariffs ranked as the third highest concern at 34.6% followed closely by wage increases at 33.3%.
John Paulsen, senior vice president at HotelAVE, said tariffs in particular make planning and budgeting difficult.
"There's a little bit of uncertainty from a business perspective, and we've seen that with corporations being like 'Do we really need to travel?'" he said. "They do typically, but it's kind of last-minute. And groups have kind of fallen off slightly."
Notably, increased insurance costs, which has been at or near the top of the list of hotel asset manager concerns in recent years, now ranked as a major issue for just 8.6% of respondents.
Despite pessimism about the broad travel demand environment, asset managers seem to have a higher degree of optimism about the broader economy as only 37% believe the U.S. is heading towards a recession in 2026.
Sorenson said that might be a symptom of growing numb to recession talk.
"We've been talking about it for so long," he said. "We're just kind of to the point where we wake up in the morning and we know there's going to be news. We just don't know if it's going to be good or bad. That's kind of the way it is."
Broadly, hotel asset managers seem to be expecting low single digit revenue per available room growth next year, with 72.8% projecting a range of 1% to 3%, 18.5% expecting 4% to 6% and no respondents calling for 7% or more.
Sorensen said it's likely this trend will "carry into [the first quarter] of next year."
"There's really no indicators that it's not a trend that's going to continue," he said.
Tepid growth rates seem to align with growth rates seen or expected for the current year. Slightly less than half of respondents — 49.4% — said full-year RevPAR growth for their portfolios will fall in the 1% to 3% range, with 17.3% saying it was roughly flat and 18.5% saw a decline. The survey showed roughly 75% of respondents didn't expect their hotels to meet their full-year budget numbers.
Asset managers looking for a change
A majority of asset managers responding to the survey indicated they're looking to make brand or management changes at their hotels to spur performance, with roughly a quarter (24.7%) saying they're going to seek both.
With less hotel construction and thus fewer opportunities to sell franchises, hotel brands are doing what they can to keep flags even through a change in ownership, Paulsen said.
"They need to hold on to their existing contracts," he said. "One example was where a brand offered some key money to stay in the deal. So there might be opportunities like that."
There is also a widespread trend of investing within properties and portfolios, with 80.3% saying they're planning renovations at one or more properties.
Emily Miller, vice president of asset management for Atrium Holding Company, said part of that is brands are getting more anxious for owners to update properties, so they are making it easier to do that.
"They're realizing they're behind on their preferred cycles, so they're creating more flexibility in programming for owners," she said. "So maybe it's not a full, 100% renovation, but it's certain bits and pieces that are the key touchpoints, which is great for us as owners."