NEW YORK — Marriott International's Noah Silverman believes that 2025, so far, is best described as a "story of two quarters" when it comes to investor sentiment in hotels.
"In the first quarter, there were lots of reasons for optimism, lots of trends that felt — both from a customer demand and development demand perspective — pretty positive, overall," said Silverman, Marriott's global development officer for the U.S. and Canada.
"The second quarter [went] a little bit differently," he said. "If you want to look back at the factors that perhaps drove that change from the first quarter to the second quarter, it's not too hard to point to. Kind of the declared tariff war around the globe."
Other development executives on the same panel at the 2025 NYU International Hospitality Investment Forum agreed that an overriding sense of uncertainty has cast a pall over doing deals.
Aimbridge Hospitality Chief Global Growth Officer Eric Jacobs said trying to forecast the second half of the year is "a little chaotic." Jacobs added he sees leisure demand cooling off in the second half of the year, but he's still hopeful for a strong summer largely driven by group.
"Group is what's going to carry us through the rest of this year," he said. "By and large, leisure business is still there. It's probably moderating a little bit, but leisure was so high that maybe it's just getting back down to a normalized level."
While many hotel investors have been sidelined in the second quarter, executives stressed this is an opportunity for those willing to take a different perspective.
"There's a dark cloud at this conference it seems like the last couple of days because of some of the negative factors that are happening, but the hotel industry is a long-term investment," said Julienne Smith, chief development officer for the Americas at IHG Hotels & Resorts. "So there's still some great opportunity and positivity, as well."
Hotel investors tend to think more long-term, but sometimes it's difficult to avoid the noise, Silverman said.
"There is just some sort of equivalent of the consumer confidence metric in our industry that a lot of [development executives] try to encourage people when it feels like it's weighing on them to think past," he said.
Agnès Roquefort, global chief development officer of luxury and lifestyle for Accor, agreed the headwinds the hospitality industry faces are real, but it's incumbent on hotel brands to continue to look for where there are opportunities.
What hotel brand companies such as Accor and others have done increasingly, she said, is lean on conversions to drive growth over new builds. That's led to a rise in collection brands that cut down on capital expenditure requirements and allowed "owners and investors to put in a bit of character" to properties, she said.
"If you look at the U.S. ... over 50% of development is collection brands," Roquefort said.
IHG has observed a clear shift in its ratio of conversions in recent years, Smith said.
"Pre-pandemic, IHG was probably about 70% new builds, maybe 30% or 25% conversions," she said. "Now we've launched a couple of brands that are a little bit more conversion-friendly — Garner and Voco, in particular — so our pipeline is a little bit more conversion-heavy."
Smith said another shift among brand companies is removing the distinction that some hotel brands are "new-build only," which used to be fairly common.
"It's just not true," she said. "There's always something that can convert into a brand within our portfolio. So we're being nimble and opportunistic."