2025: The year that started with optimism and ended with caution for hoteliers
"Cautious optimism" is among the most common cliches heard across the hotel industry every year, but still an apt description of how many hoteliers felt at the start of 2025.
But as the year progressed, more and more of that optimism faded due to increasing and persistent headwinds such as tariffs and macroeconomic issues, leaving hoteliers with a year full of caution.
"First of all, we're all optimists, right?" said Michael Lipson, CEO and Chairman of Access Point Financial. "So we thought '25 would be better than '24. It was and is as an industry and at the company level. I think some of us thought it would go faster, but obviously we have to listen to the global events and the national events. Nobody knew back then what things like Liberation Day would mean and other considerations."
Mary Beth Cutshall, chief growth officer for Vision Hospitality Group, confirmed that indeed "cautious optimism" was her primary feeling to start the year.
"I entered 2025 cautiously optimistic with the potential uncertainty, not really clear how it would play out, and I would say the theme as the year went on was that lack of clarity and continuous disruption and challenges that we had to navigate, whether it would be the tariffs, various impacts to different demand segments, markets, that sort of thing," she said. "A bit of an unexpected year from that perspective."
Ryan Bosch, principal at Arriba Capital, agreed that "cautious optimism" is a term that mostly wore out its welcome in 2025.
"For us on the capital market side, we've been cautiously optimistic for the last 36 months," he said. "So like everybody else, that's how I felt coming into the year. I think by February tariff announcements kind of threw the year off course. And from there, it was much of the same that we saw in '24."
But while a weakened demand environment put a cap on overall performance, hotel operators almost universally said there were still opportunities to shine through the course of the year, particularly when judged on a relative basis.
Michael Woodward, executive vice president and chief growth officer for HVMG, said while the year has been significantly more challenging than many hoped, there were still opportunities to outperform competitors, focusing on metrics like growing market share and net new revenues.
"Obviously you got to really focus on the middle lines and all that, your expenses, but there's a lot of those uncontrollables on the expenses," he said. "You can't control utility costs. You can't control your labor costs around you with what people are trying to steal your employees and all that. But you know, it starts with the top line. And if you can win your market and you operate with an owner mentality, everyone wins and everybody's happy."
Cutshall agreed that handling the challenges of the year can help set certain companies apart.
"It reminds me of sailing, tacking on the water and trying to navigate the best that you can," she said. "And I really do think being nimble and adaptive have been very important skills this year."
Richard Lou, CEO of Palette Hotels, said despite the headwinds, he looks back at 2025 positively because of the opportunity it presented hotel managers.
"I'm going to mostly remember the dynamic ways that the industry has shifted, whether it's through the changing consumer landscape, the integration of AI into the business, as well as the evolving business model that I think the entire industry has been pushed into," he said. "Those are the dynamics that has made it really interesting."
My Place Hotels of America Chief Operating Officer and Chief Legal Officer Matthew Campbell has a similar viewpoint for the year, noting he takes pride in the resilience he saw both from the industry at-large and his company specifically.
"I'll look back [on 2025] and say, 'Hey, we were resilient because we stayed true to who we are, and that's certainly driving the property success in 2025, 2026 and beyond," he said
The mood of the hotel industry noticeably shifted through the course of 2025, and there might be no better barometer tracking that shift than the tone of commentary at major hotel industry events throughout the year.
Here's a compilation of highlights illustrating how hotel executives' outlook and mindsets shifted across the calendar year.
Americas Lodging Investment Summit
The Americas Lodging Investment Summit has a reputation for being the most optimistic event on the hotel industry calendar given its proximity to the New Year. And that seems to have been the case in 2025, with some top hotel industry executives laying out why they felt particularly good about the business environment in the early days of the second term for U.S. President Donald Trump.
Hilton President and CEO Chris Nassetta expressed optimism that the federal government would help create momentum with a curtailed regulatory environment and tax cuts.
“Businesses like certainty, and we’ve been living in an environment where the businesses are pretty good, but you don’t know what’s going to happen from a regulatory point of view,” he said. “You don’t know what’s going to happen from a labor point of view. You don’t know what’s going to happen from a tax point of view.
“As a business, when those things are sort of up in the air, you’re going to pull your reins in a little bit. You’re going to spend less.”
Marriott International President and CEO Tony Capuano said he felt good about the trajectory of the lending and construction environment and what that ultimately meant for his business.
“I think all of us sit here with pipelines, with dozens if not hundreds of shovel-ready projects,” he said. “Those aren’t paused because of the current inflationary or interest-rate environment. They’re not paused because we’ve got a little bit of elevated construction costs. It’s just that there’s not the free flow of debt — for existing assets, yes, but for new construction, it’s still a bit constricted.”
Hunter Hotel Investment Conference
The optimism was in tact but more muted by the time the Hunter Hotel Investment Conference rolled around in March. By this point, executives were preaching the need for patience as they waited for the floodgates to open.
Scott Trebilco, senior managing director, real estate, for Blackstone, noted the cost of capital simply remained too high at that point for many deals to pencil.
“The cost of capital in totality, between equity and debt, is still elevated,” he said. “There’s not a lot of core capital. There’s not a lot of international capital coming into the U.S. hotel market today. The combination of that, coupled with a moderating growth environment and revenue that hasn’t outpaced inflation, really translates to a more difficult environment.”
And experts warned the industry needed to move quickly to embrace artificial intelligence.
"The agent is the AI, right?" Kevin Jacobs, chief financial officer and president of global development at Hilton, said. "The thing doing the booking in the future, in the near future, might not be a human. [It] may actually be a bot doing booking, and that has incredible implications for search."
International Hotel Investment Forum — EMEA
Just weeks later in Berlin, the International Hospitality Investment Forum EMEA kicked off with varied outlooks across the region.
Continued uncertainty in the U.S. did affect the overall outlook in general, but Accor Chairman and CEO Sébastien Bazin said travel will continue to be a unifying force across the globe.
“Let's leave the leaders to decide what they have to decide. It's all about caring, interconnecting people and culture. Let's not miss that moment and be too focused on government leadership,” he said.
NYU International Hospitality Investment Forum
Full-year expectations were clearly trending in the wrong direction by the time the NYU International Hospitality Investment Forum began in early June, with the STR revenue per available room projection dropping 0.8 percentage points.
"Looking at demand across the country, it has definitely been a roller coaster so far in the first five months of the year, but there have been some really bright spots," STR President Amanda Hite said.
The tone of the industry shifted from one expecting to turn the corner in the near term to one where better days are ahead for those who can weather the storm.
"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 Noah 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."
Hotel Data Conference
The banner headline of the Hotel Data Conference in August was yet another forecast downgrade amid a backdrop of worrying economic data.
"Right now, we're in a bit of a rough patch. As you may have heard, the jobs numbers were lower than expected — not only for this past month, but for the last three months with revisions, averaging only 35,000 jobs per month," Adam Sacks, president of Tourism Economics, said. "But in context, this is the weakest job growth that we've had since the pandemic. And, if it were not for the health and social services sectors, employment would have declined over the last three months."
And once again, "uncertainty" remained a common theme for the year.
"Things aren't great, and we're not expecting improvement in the near term," Kelsey Fenerty, manager of analytics at STR, said. "The biggest, most No. 1 reason that we missed our [initial] forecast and continued to downgrade is really so abundant. It's that uncertainty that remains that makes this so challenging."
The Lodging Conference
At The Lodging Conference in early October, that uncertainty was seemingly coupled with yet more worrying trends.
“With President Trump, we’re jumping into the unknown,” Bernard Baumohl, chief global economist for The Economic Outlook Group, said. “It’s causing a lot of confusion, chaos and uncertainty.
"Over the last nine months, we have strayed so far away from the norms of economics, politics and the law, that it’s virtually impossible to predetermine the course of the economy with any degree of confidence or accuracy beyond the next couple of months."
And top executives drew a clear line between that uncertainty and the troubles of the industry.
"What's tough on our industry always is uncertainty," said Joe Berger, president and CEO of BRE Hotels & Resorts. "It's been a tough year to navigate."
Leeny Oberg, chief financial officer and executive vice president of development at Marriott International, said it also presented challenges for investors.
"You've got all these people trying to make plans about their cutbacks and what they're trying to do with their properties, and it's literally every week or every day there's a new announcement. 'Oh, it's furniture today,' or, 'Oh, it's this country today.' From a planning perspective, it makes it extremely difficult," she said.
2025 was by most measures a difficult year for the hotel industry, but most hoteliers and experts looking for just a single word to describe the year focus on how companies have been able to weather the storm rather than overcome the storm itself.
Speaking on the latest episode of the CoStar News Hotels podcast, Access Point Financial CEO and Chairman Michael Lipson said the word that best describes the year is "resilience."
"We price every night, and we adjust to the market," he said. "We've been able to adopt, adapt and evolve and continue to push forward. So next year will be a better year."
Lipson was one of nine experts to share their opinions on how to best distill the essence of 2025 into just a single word.
Mary Beth Cutshall, chief growth officer for Vision Hospitality Group, leaned into how guests view the hotel industry rather than metrics to define the year.
"The word that really stands out to me is 'experiential,' and I say that because we've officially moved past the idea that a hotel is just a place to sleep," she said. "Today, people are choosing hotels because they want to feel something when they walk through the door."
While these takeaways might reflect hoteliers' typically optimistic viewpoints, it was impossible to overlook the challenges hoteliers have faced through the course of the year.
HSMAI President and CEO Brian Hicks noted as much by picking "uncertainty" as his word to encapsulate the hotel industry's experience in 2025.
"There were so many ups and downs, whether it be fears of recession, government shutdown, employment, you name it, it just was a year of uncertainties, and I think that paralyzed us as an industry a little bit because people were hesitant to make big changes," he said.
For all of the word of the year selections, listen to the podcast interview embedded above.
Commercial real estate finance and advisory firm Walker & Dunlop Inc. reported that it closed the single largest land acquisition loan in Miami that will eventually be the home of an Aman-branded luxury hotel.
The firm arranged the $464.5 million loan to finance a 4.25-acre bayfront parcel in Miami’s Brickell District that will be the site of Atma Miami by Aman. The property will be the domestic debut of the Atma brand. According to the news release, Walker & Dunlop Capital Markets Institutional Advisory worked on behalf of Oak Row Equities and OKO Group for the acquisition and predevelopment bridge loan from TYKO Capital.
The land acquired has two buildings currently — a 31-story rental building and a 32-story office tower. The release does not disclose the addresses of these two existing buildings.
Timeline and construction details for the Atma Miami have not been released yet. According to Walker & Dunlop, a 185-key luxury hotel will open alongside 480 ultra-luxury residences that will be rolled out in two phases. The property will also have a spa, private marina and racquet club.
“We are pleased to support the owners and lenders in closing this beneficial transaction,” said Aaron Appel, senior managing director at Walker & Dunlop. “The site represents the largest and final waterfront parcel of its scale in Brickell and will become an ultra-luxury destination that redefines holistic living and leisure. We are proud to deliver a tailored financing solution alongside trusted capital partners and are grateful for the collaboration that brought this landmark deal to a successful close.”
Aman doesn't currently have any information about the new luxury hotel and residences on its website, but it does have a few details on the Aman Miami Beach, which is slated to open in 2027 in Miami Beach’s Faena District, that also consists of a hotel and residences.
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