State of the Consumer 2025: When disruption becomes permanent
State of the Consumer 2025: When disruption becomes permanent
https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/state-of-consumer?
Becca Coggins is a senior partner in McKinsey’s Chicago office, Christina Adams is a partner in the Dallas office, Kari Alldredge is a partner in the Minneapolis office, Alyssa Hopcus and Laura Bucklin are consultants in the Bay Area office, and Justin Shamoun is an associate partner in the New York office.
Five years after the start of the COVID-19 pandemic, consumers’ crisis-era habits have lingered. Here’s what organizations can do to outcompete in the second half of the decade.
At the start of the decade, consumers adopted a slew of new behaviors—almost overnight—in response to the COVID-19 pandemic. Remote work, digital connectivity, and solo activities became the norm for life in lockdown.
Today, the world has reopened, but the era of uncertainty and its impact on consumers linger.
Globally, consumer sentiment is still poorer on average than it was at the beginning of 2020, and consumers remain concerned about rising prices and inflation. Despite this persistent uncertainty, they keep spending. In fact, the relationship between sentiment and spending has weakened. Meanwhile, consumers’ expectations for value and convenience have them making unexpected trade-offs across categories: trading down in one place while simultaneously splurging on something else. These choices may be confusing to anyone trying to predict what consumers will do next.
It’s not that today’s consumers are irrational; it’s that the old frameworks used to decipher their behavior no longer apply. What once seemed like short-term adaptations born of the COVID-19 pandemic have solidified into lasting behavioral change. As the world heads into the second half of the decade, consumer-facing companies confront new challenges, but being able to understand the motivations of an unpredictable consumer can help them stay agile and relevant.
From an analysis of the McKinsey ConsumerWise Sentiment Survey and State of the Consumer Market Survey data, we have identified five behavioral forces that will shape the sector in the years ahead and four strategic imperatives to position organizations for growth. (While growth in emerging markets and global demographic shifts, such as an aging global population and lower average birth rates, are also reshaping the consumer landscape, this article focuses on the sticky consumer behavioral changes that we see affecting the world’s largest markets.)
Five COVID-19-era dynamics that are still shaping the consumer sector
At the beginning of the COVID-19 pandemic, consumers adopted new behaviors extremely quickly, and some of those behaviors have endured. To understand how consumers have changed, we conducted the McKinsey ConsumerWise Sentiment Survey among more than 25,000 consumers in 18 markets that together account for around 75 percent of global GDP. Their answers, as well as those of participants in the State of the Consumer Market Survey, reveal how today’s consumers spend their time, who they trust, and how they ascribe value.
1. People are spending more time alone and online
The behaviors that consumers adopted for coping with life under COVID-19 lockdown—namely, a reliance on digital connectivity and at-home activities—are now permanent parts of their daily lives. Globally, consumers still spend their time and money differently than they did five years ago. They’re more intent on immediate gratification and convenience and have a higher focus on self than before.
Consider this: US consumers in 2025 report that they have over three hours more of free time a week, on average, than those in 2019 reported. But they allocate nearly 90 percent of that time to solo activities. The biggest increases are in time spent enjoying hobbies or relaxing independently, shopping, performing fitness activities, and being on social media. Comparatively, the share of time spent with friends, with family, and on in-person cultural activities (such as going to movies, concerts, and the theater) has remained flat—and therefore decreased as a share of total free time.
This isn’t to say that consumers intentionally try to maximize their alone time. In many ways, remote work and the acceleration of e-commerce have created additional free time in the week and made staying connected easier to do from home. To be sure, there are variations across markets: Consumers in China report spending more of their free time with friends or family and even more time on self-improvement and shopping for pleasure compared with consumers in the United States.
Consumers are also using e-commerce and food delivery services at high rates. Over 90 percent of Chinese and US consumers in our survey say that they shopped at an online-only retailer in the previous month; the same is true for over 80 percent of surveyed consumers in Germany and the United Kingdom. Rates for grocery delivery are also high: Nearly 40 percent of German, UK, and US consumers surveyed report that they used grocery delivery in the previous week. Over one-third of consumers across all four of these regions identify Amazon or Taobao as their go-to shopping destination for all their needs.
This growing demand for convenience has cemented a bring-it-to-me mindset that isn’t only reshaping retail but also driving dining and grocery delivery. Food delivery’s share of global food service spending rose from 9 percent in 2019 to 21 percent in 2024
We anticipate that consumer tolerance for friction and inconvenience will continue to decrease while their expectations for service and speed will increase—both within existing categories and beyond them. Consumers will continue to raise the bar: Speed will become table stakes for delivery and e-commerce. Additionally, consumers will add low cost, reliability, and the ability to make returns to their expectations.
2. Digital channels win users but not their trust
Consumers tell us that social media is their least trusted source when making buying decisions, yet it’s where they interact with family and friends, who serve as their most trusted sources. Even though trust in institutions and media is low, always-on social and digital channels subtly influence consumers’ purchase decisions and brand perceptions.
The COVID-19 pandemic drove a decade’s worth of digital adoption in less than a year, altering the way that consumers engage with brands and media. The power and influence of audience aggregators—including search engines and social, streaming, and gaming platforms—expanded as engagement grew and consumer attention became more fragmented. Brands and retailers have followed consumers to these platforms. But broadcasting a brand campaign on digital platforms is hardly enough to sway consumers.
In our research, consumers in Europe and the United States report that social media influences them the least when it comes to brand and product recommendations and that family and friends influence them the most. In China, consumers also say that family and friends are their greatest influence, though they also cite several other sources (such as social media and online reviews) as influential. There are nuances, of course, depending on the category. In the travel category, for example, 38 percent of US survey respondents rank influencers who they follow among their top three trusted sources. In the snack category, only 13 percent do the same.
Still, digital platforms unquestionably influence consumers’ purchase journeys. Across markets, we see an increase in social media use for product research (32 percent, on average, compared with 27 percent in 2023). In emerging markets, the figure is especially high: Roughly half of surveyed consumers in India research products on social media before they make a purchase. Meanwhile, 29 percent of surveyed consumers in Germany, the United Kingdom, and the United States say that they have purchased a brand that they learned about through social media.
Social media use is no longer reserved for younger generations, either: 33 percent of Gen Xers surveyed across Europe and the United States state that they’re on TikTok, while 35 percent of baby boomers in those regions report that they’re on Instagram. In China, an average of nearly 90 percent of surveyed consumers across age groups say that they’re on Douyin and WeChat.
The challenge for brands is to maintain authentic yet personalized messaging across platforms. Companies must consider multiple sources, including social media, influential voices, product reviews, and ratings, to shape their messaging.
3. Gen Z grows up and spends
Understanding Gen Z consumers and their spending behavior presents one of the single greatest opportunities for consumer brands and retailers. Gen Zers (born between 1996 and 2010) are projected to make up not only the largest generation but also the wealthiest in history. The average 25-year-old Gen Z consumer in the United States has a household income of $40,000, 50 percent higher than the average baby boomer’s at the same age (accounting for government transfers, inflation, and taxes). Gen Z spending, which is growing twice as fast as previous generations’ spending did at the same age, is on pace to eclipse baby boomers’ spending globally by 2029. By 2035, Gen Zers will add an additional $8.9 trillion to the global economy.
For brands, understanding what drives Gen Zers is critical for long-term growth. They’re the first members of a generation to grow up in a digital world, and they reached adolescence and young adulthood during the COVID-19 pandemic. These experiences have shaped their feelings around traditional markers of adulthood.
According to our survey, Gen Zers across markets are less likely than members of older generations to define themselves based on life stage milestones, such as getting married and having children. They’re much more likely, however, to define themselves based on achievements related to financial security, such as career success and creating wealth (73 percent and 36 percent more likely than members of older generations, respectively). This may be due in part to the pressures that they face regarding high living costs and student debt.
Gen Z’s feelings about the world differ from those of older generations, too. Globally, Gen Z consumers are more optimistic about social issues compared with other generations but less optimistic that inflation will stabilize and prices will come down. About 40 percent of Gen Z respondents across Germany, the United Kingdom, and the United States say that they’re worried about their financial futures (compared with 31 percent of members of older generations). This concern, however, isn’t universal. In China, only 11 percent of surveyed Gen Zers report that they’re worried about their financial futures (this may be because saving money is a habit more common in China than in other places).
In any case, Gen Zers’ financial fears aren’t holding them back from spending. Half of surveyed US Gen Z consumers (and 35 percent of those in Germany and the United Kingdom, but only 8 percent of those in China) state that they don’t have enough money saved to support their lifestyle for more than one month—yet they still prioritize spending. More than one-quarter of surveyed Gen Z respondents report using buy-now-pay-later services to make a purchase, a behavior particularly prevalent among Gen Zers in China (40 percent), India (38 percent), the United Arab Emirates (36 percent), and Australia (35 percent).
Despite having a smaller financial cushion, Gen Zers are the surveyed generation members most willing to splurge and take on debt. In China, Germany, the United Kingdom, and the United States, 34 percent of surveyed Gen Zers report a willingness to buy on credit, which is about 13 percentage points higher than other generations. Gen Z’s desire for financial security, alongside a tendency to splurge, means that brands need to create products and experiences that Gen Z deems splurgeworthy (which may be based on the latest trends or word of mouth). Surveyed Gen Zers tend to splurge on apparel (34 percent) and beauty (29 percent.
One thing that brands should keep in mind: Gen Zers often pay a premium for convenience. Across key markets, a higher share of Gen Zers say that they use grocery and food delivery services compared with members of any other generation.20 Looking ahead, Gen Z consumers will set the tone for broader consumer expectations. Businesses that best understand where Gen Z is prioritizing spending will be positioned for success.
4. Consumers lean local over global
Over the past five years, we have seen disruptor consumer brands encroach on global, multinational brands. That trend has evolved in 2025: As new global trade agreements take shape and disruption continues, consumers are signaling the importance of buying local from their own markets.
Globally, 47 percent of consumers identify locally owned companies as important to their purchase decision. In Canada and the United States, in particular, the preference for local brands has jumped meaningfully compared with the first quarter of 2025.
When we asked why consumers across markets prefer local brands, 36 percent say that they want to support domestic businesses. For 20 percent, local brands better fit their needs. Only 13 percent say that domestic brands are more affordable.
Some consumers outside the United States are also growing wary of American brands. In Europe, 42 percent of survey respondents report that they have a worse or somewhat worse perception of American brands in May 2025 than they did at the beginning of the year.
Consumers want to shop locally, a desire that’s evident in categories such as apparel and household supplies. While this trend is most pronounced in Canada and the United States, we also periodically see it in other markets. In China, for example, six of the top ten beauty brands with the most market share growth since 2020 are Chinese (up from only two from 2015 to 2020). In Japan, nine of the top ten snack brands are Japanese.
Looking ahead, multinational companies will have to clear a higher bar to successfully operate beyond their core markets. Tailoring their offerings to local tastes and trends, localizing sourcing where possible, and making strategic portfolio and brand decisions on the ability to win markets will be critical. For some companies, this could mean refocusing on their core businesses as market and trade conditions remain turbulent.
5. Consumers solve the value equation in new ways
Rising prices continue to be the number-one cause for concern among consumers across all 18 of the markets in our survey. The issue far outranks the next several leading causes of concern, including climate change, international conflict, and unemployment or job security. As a result, consumers are trading down, sometimes in unexpected ways and across categories rather than only within them.
Globally, 79 percent of surveyed consumers are trading down but not necessarily by purchasing fewer items or seeking discounts at lower-priced retailers (though these actions are still common). Instead, more than half of surveyed consumers across markets say that they look for deals on every purchase, and about 49 percent of US consumers surveyed plan to delay purchases over the next three months. When asked about spending plans in the apparel category, 47 percent of US consumers surveyed report that they wait for a sale or promotion (22 percent of respondents in Germany and the United Kingdom report the same).
Cross-category trade-downs—trading down in one category to afford something in another—are becoming more prevalent. In the first half of 2025, more than one-third of consumers surveyed state that they have traded down in one category while planning to splurge in another. More striking is the fact that 19 percent of surveyed consumers globally plan to cut back in a nondiscretionary category but splurge in a more discretionary category.
Some consumers are unwilling to give up indulgences that they became accustomed to during the COVID-19 pandemic. Even among consumers who state that they’re concerned about rising prices, over one-third still have plans to splurge. We see this across regions—most prominently in Brazil, China, and the United Arab Emirates.
The takeaways? Consumers are redefining what value means to them, which is undoubtedly influencing how they shop. Discount and wholesale channels continue to attract consumers across age groups and income levels (for example, 80 percent of surveyed US Gen Zers report having shopped at a wholesaler in the previous month). Brands will need to strategically manage their marketplace, show up where consumers seek value, and ensure that their sale and promotional tactics drive real value.
Four strategic imperatives that can help consumer players win
A new baseline has emerged for consumer decision-making. Despite a high level of uncertainty—not only in consumer sentiment, but also in geopolitical and economic outlook—there are many areas in which brands can find growth. We have identified four strategic imperatives for consumer players in the year ahead:
- Get even closer to the consumer. Consumer sentiment is no longer neatly aligned with consumer spending, and simple methods for predicting consumer behavior are insufficient. Companies need to build a 360-degree view of their consumers that enables proactive decision-making. This means leveraging new capabilities, such as AI-powered social-listening tools, and ensuring that the organization has granular behavioral data from its owned websites or stores. For consumer goods companies with limited first-party data, building capabilities to gather consumer insights and third-party data beyond their subsector is key.
Still, gathering insights is only half the battle. Consumer companies can deploy tools to generate both predictive and prescriptive analytics (these include data points, such as churn risk and product preferences, and personalized recommendations, respectively). Together, these analytics form a strong insight and analytics backbone that allows consumer players to unlock the power of personalization and targeted marketing.
- Invest in the revenue-growth-management (RGM) engine. Consumers have become more price aware and deal oriented, and they evaluate trade-offs in broader ways than they did in the past. Offering the right product at the right price at the right time has become more important and harder to do than ever, especially as digital platforms enable consumers to comparison shop. For brands, it’s table stakes to get RGM right. This includes using analytics to drive informed pricing decisions, strategically managing trade terms, and conducting regular assortment optimization. Innovating across the RGM ecosystem, however, can unlock additional value. Doing so means building advanced, automated analytical models that use predictive AI, consumer-backed insights, and behavioral-data sources. Making these investments allows consumer players to deploy promotional spending in more personalized ways, reaching consumers at the right moments with the right offer. Brands can also rethink their partnerships with retailers, finding ways to connect pricing through retail media activation and collaborating to share data in ways that can further fuel advanced RGM models.
- Tailor the portfolio for growth. As disruptive brands, high-velocity trends, and unpredictable consumers continue to define the sector, consumer companies must obsess over their sources of growth. This means leaning into M&A and divestitures (M&A&D) continually. Consumer players should strive to generate 20 to 30 percent new revenue from their portfolio every ten years. Those that leverage M&A&D for growth generate 2.5 percentage points more TSR than those with organic growth alone do. This also means reinventing business capabilities. E-commerce is poised to be among the biggest arenas for competition. Much of this growth will come from higher penetration in developing economies and the acceleration of new business models, such as social commerce.
- Rewire tech capabilities. Even if consumer players manage to achieve each of these strategic imperatives, they will struggle to maintain a competitive advantage without rewiring their tech capabilities, including restructuring their organizations to accommodate technology investments. Among the 140 agentic AI and gen AI use cases that consumer players should prioritize, shaping consumer insights and demand and managing customers and channels represent the greatest value. Consumer businesses that make long-term, transformative investments in rewiring for growth could unlock up to a 15-percentage-point improvement in EBITDA margins.
Our 10 Favorite Travel Experiences of 2025
Courtesy of Fodor's Travel
https://www.fodors.com/news/photos/our-favorite-travel-experiences-of-2025
A look back at an exciting year of adventures here at Fodor’s Travel.
As another year draws to a close, our team is looking back on 12 months of adventure, tasty meals, and inspiring trips, the memories of which we will be carrying forth into the New Year.
For some of our editors, travel this year was a conduit to healing, offering the calm and rejuvenation found in Canada’s wild nature. For others, 2025 was a year of new challenges—like hiking 80 miles across Spain on the Camino de Santiago or finding oneself on hand and knees, sifting through the dirt for truffles in Oregon’s wine country. For many of Fodor’s editors, 2025 was a year of crossing off bucket-list items, like finally experiencing Iceland firsthand or visiting Yellowstone National Park.
From discovering new favorites in beloved destinations like Charleston to enjoying a visit to Germany’s wine and spa town, Traben-Trarbach, here are some of our editors’ favorite travel experiences of 2025.
Guoqiang Xue/Shutterstock
A Post-Op Recovery in New Brunswick, Canada
My 2025 travels came to a grinding halt after a ski accident in Japan led to an ACL surgery, so by the time I was ready to hit the ground running (er, walking), I weighed my options carefully, ultimately deciding on a place I knew nearly nothing about: New Brunswick, Canada.
Having enjoyed a glorious few days at Montage Healdsburg with my husband as my first post-op trip, I was excited to embark on a solo journey to Saint Andrews and Fredericton, two stops in the oft-overlooked Atlantic Canada province that promised tons of fresh seafood, incredible whale watching, a genuine beer trail, and a lively night market with every kind of cuisine imaginable.
In Saint Andrews, I discovered myriad charms and the friendliest people around. I ate oysters at every meal, but my favorite dine-at-the-bar experience was at William & Water, where I got tips from locals on where to get the best ice cream (McGuire Chocolate Company) and where to go for live music (Saint Andrews Brewing Company). In Fredericton, I kayaked on the Wolastoq River, got back on a bike, and napped in a sleigh bed at Quartermain House, a family-run bed and breakfast. On my last day in town, I met up with local food obsessive @freddy.foodie and proceeded to do a bakery tour, finishing at Seoul Boulangerie, which may just be the best patisserie in all of New Brunswick.
– Stacey Lastoe, Contributing Digital Editor
PHOTO: Colin + Meg/Unsplash+
Exploring Banff With Indigenous Guides
In October 2025, I visited Banff, Canada, to experience the scenic town with the help of several Indigenous guides and representatives. I had the pleasure of e-biking through the Banff forest trails with Indigescape, whose guides gave me the opportunity to partake in sacred ceremonies; hiking around Cascade Ponds with Mahikan Trails, whose guide gave me insights into the region’s various native plants and their traditional medicinal uses; and walking through the Buffalo Nations Luxton Museum with a Stoney Nakoda Knowledge Keeper, who delved into the history of Banff and its relationship with the local First Nations. The mountain scenery was spectacular wherever I turned, and the food—particularly dishes using bison—was delicious; but being equipped with the insights provided by the Indigenous guides made what I was looking at even more meaningful.
– Yoojin Shin, Associate Print Editor
PHOTO: Burkard Meyendriesch/Unsplash
An Anniversary on the Camino de Santiago
In September, my husband and I decided to hike the last 100 km of the Camino de Santiago for our anniversary. We started our trek in Sarria, hiking each day to another charming town in the Spanish countryside before continuing on the next day. Over the course of a week, we walked the 100 km to Santiago de Compostela. Through the aches and pains, the hills and rain, the emerald forests and magical encounters, we came to fall in love with the Camino in a way we haven’t fallen in love with a destination in the past. By the time we arrived at Santiago de Compostela, exhausted, achy, and exhilarated, we were both proud of what we’d accomplished and sad to reach the end of our trail. We had such a transformative and magical time on the Camino that we’ve decided to hike another of its routes—this time the Camino Norte along the coast—next fall.
– Nikki Vargas, Senior Digital Editor
PHOTO: New Africa/Shutterstock
Truffle Hunting in Oregon's Wine Country
In March, I went truffle foraging on a misty piece of forestland in Oregon’s wine country. Our guide, Ava from First Nature Tours, instructed us to turn off geotagging to keep our location secret since truffles sell for up to $70 an ounce, and foragers will go to great lengths to guard their best spots.
I learned that modern truffle hunting doesn’t involve pigs. Instead, we relied on the discerning nose of Ava’s award-winning truffle dog JoJo, a bouncy Labrador whom Ava adopted after finding her abandoned on the street. When JoJo snuffled her wet nose into the soil and pawed at the dirt, we pulled out our trowels and got to work.
At a time when many of us feel so separated from and suspicious of our food sources, getting down on hands and knees to sift through damp soil was incredibly satisfying. I felt like a treasure hunter, utterly euphoric every time I unearthed one of those little delicacies. We departed with a handful of truffles and tips on how to infuse them into butters and cheeses once we got back home.
– Esme Benjamin, Contributing Digital Editor
PHOTO: Getty Images for Unsplash+
A Roommate Yacht Cruise in Croatia
This summer, my roommate and I sailed on a small luxury yacht cruise through the Dalmatian Coast in Croatia. Jumping off the back of a luxury cruise ship into crystal clear waters during the daily swim stops was definitely one of the main highlights of my year.
With only around 35 people aboard this Unforgettable Croatia ship, none of us could even form a complaint with how relaxing each day was. After days filled with swimming and touring different islands along the coast, each night ended with fantastic dinners at port, like the beautiful flower-filled outdoor courtyard dinner at Puteus Palace, or the fantastic final night with a curated tasting menu at the Dubrovnik Restaurant.
– Angelique Kennedy-Chavannes, Associate Print Editor
PHOTO: Lizaveta_K/Shutterstock
Germany's Wine and Spa Town
My travel year was one of several firsts: my first trip to Yellowstone National Park, my first visit to North Topsail Beach in North Carolina, but the highlight may have been a visit to Traben-Trarbach, a wine-and-spa town on the middle Mosel River.
I often tell my friends that Germany is an underappreciated country to visit in Europe, especially once you get beyond top destinations like Munich and Berlin. While nearby Trier was buzzing with tourists in late spring, little Traben-Trarbach hadn’t quite woken up from its winter slumber, making it all the more pleasant. With lovely late-spring weather and a placid Mosel River, I was able to stroll the picturesque Art Nouveau town, visit the city’s extensive underground wine cellars, taste some excellent local food and wine at Die Mosel Vinothek & Winebar, and enjoy a stay at the excellent riverside Romantik Jugenstilhotel Bellevue. I was envious of my groupmates who got to stay at the hotel’s sister property, the Moselschlösschen Spa & Resort.
Long a destination for discerning Germans, the hotel completed a lavish (and award-winning) multilevel spa during the pandemic and has significantly expanded the region’s destination-spa offerings. To top things off, the hotel’s owner took us all on a trip in a vintage Amphicar, an option he offers to all hotel guests.
– Douglas Stallings, Print Editorial Director
PHOTO: F D/Unsplash
A First-Time Visit to Iceland
In September, I finally arrived in Iceland for the first time, staying at two very different but incredible properties. First, I had the most relaxing two days of my life at the Retreat, the luxury hotel at the Blue Lagoon, where I experienced private Blue Lagoon access sans crowds, superb Michelin-starred dining, lush skin care products derived from the lagoon itself, gorgeous rooms, and an absolutely incomparable spa experience (that included an IN lagoon massage).
Then I headed to the Highlands, one of the most remote places in the whole country where I hiked in the steamy geothermal area that the Vikings once thought was literal hell, mountain-biked to a waterfall, took advantage of the nearby natural thermal baths, and saw the Northern Lights TWO nights in a row, all while staying at the cozy, chic Highland Base.
– Amanda Sadlowski, Senior Print Editor
PHOTO: Meizhi Lang/Unsplash
Crossing Switzerland Off My Bucket List
Switzerland has long been on my bucket list, and this year I got to cross it off the list when I spent a few days exploring Zurich. From an early morning yoga class at a seebad (a public open-air swimming facility) on Lake Zurich, to searching for treasures at a weekend flea market along the Limmat River, followed by sausages at the Sternen Grill, and drinks at the incomparable Dolder Grand, I did it all. I even managed to squeeze in dinner at Restaurant Kronenhalle where I dined under the gaze of priceless works by Marc Chagall and Joan Miró—it was definitely a pinch me moment. But the biggest thrill might have been the private chocolate-making class at the Lindt Home of Chocolate, where we made our very own Dubai chocolate bar. It was divine, and the perfect way to cap off the trip, because what’s a visit to Switzerland without a lot of chocolate?
– Alexis Kelly, Senior Print Editor
PHOTO: Leo Heisenberg/Unsplash
A New Favorite in Charleston, South Carolina
Since Charleston is overflowing with hotels, restaurants, bars, and boutiques, I’m always on the hunt for new favorites. This year, I lucked into one: the delightfully pink Mills House Charleston, Curio Collection by Hilton, which feels like the distilled essence of Southern charm. Think Spanish moss dangling from live oaks, horse-drawn carriages clipping over cobblestone streets, cast-iron balconies, and a gentle fountain burbling in the background. Sip a classic cocktail at the Iron Rose—my pick is the namesake Iron Rose, their spin on an espresso martini—and settle into the courtyard for some top-tier people-watching. It’s the perfect place to lean fully into the fantasy of Charleston at its most grand and glowing.
– Rachael Levitt, Digital Managing Editor
PHOTO: Jeremy Tarr
A Leonard Cohen Tour Through Montreal
I spent a day in Montreal wandering in Leonard Cohen’s footsteps, guided by the noted journalist Richard Burnett. Burnett is a veritable Mr. Montreal, with deep family ties to the city and a knack for having a story to tell about almost every block in town.
My obsession with Cohen dates back decades–and though I once lived in the same Los Angeles neighborhood as he died in, and he once tipped his hat to me at a cafe on Pico Blvd, there is a particular specialness in wrapping oneself in the haunts of a hero’s youth. These Montreal streets made him the man he was, and in turn, birthed a legend.
Dining where he dined–Schwartz’s Deli, Moishes (though its location has changed since Cohen’s death in 2016), and St. Viateur Bagels; passing through his old college stomping grounds, where his life as a poet began at McGill University; peering into the windows, a little like a peeping tom, at his residence on 28 Rue de Vallieres, where I left him a Viateur bagel as an offering–well, it’s all more than any fanboy can hope for.
Beyond the main stops on the Cohen route, he is as much ingrained in the city as it once was rooted in him. Towering murals have been painted on buildings, his photograph is posted in establishments, and his music plays regularly.
I sat at the bar of Cabaret L’Enfer, the restaurant of Top Chef semi-finalist Massimo Piedimonte, eating a gorgeous tasting menu, drinking a divine pinot noir, and watching the chef interact with his six-year-old daughter, who drifted from watching Nightmare Before Christmas in the corner to playing pretend maître d’ at the door, to adding the gratin tableside to a pasta dish made of a vine grown in Piedmont’s garden–it was already a lovely, quaint scene. But then Cohen’s melancholy ballad, Dance Me to the End of Love, tumbled out from the speakers. My eyes grew misty, my smile nostalgic, I mouthed the lyrics, and the lovely, quaint scene transformed from a nice moment to something that would forever be etched in my memory.
– Jeremy Tarr, Digital Editorial Director
UK hotel transactions set up for 'good year' in 2026 but macroeconomic environment tempers excitement
Both domestic, international investors expected to target hotels in UK, Ireland
The £160 million acquisition of the 630-room Novotel London West by Arora Group and Deva Capital was one of the United Kingdom's major single-asset hotel deals in 2025. (CoStar)
https://www.costar.com/article/2053639067/uk-hotel-transactions-set-up-for-good-year-in-2026-but-macroeconomic-environment-tempers-excitement?
For another full year, single-asset hotel sales dominated the United Kingdom and Ireland transactions market, but there were some notable portfolio sales. Hotel industry experts are confident that 2026 will be a positive year for transactions, but macroeconomic trends and updates to the U.K. budget will give hoteliers some pause.
Victoria Hills, partner, corporate real estate at law firm Macfarlanes, said a trend that became more pronounced across 2025 is that deals are taking longer to come to fruition.
“2025 has been an OK year; 2026 is set up to be a good year, but macroeconomic trends could mean it will not be,” she said.
Laura Wild, partner and global co-leader of hotels and hospitality at Bryan Cave Leighton Paisner, said in the run-up to the U.K. government’s Nov. 26 budget announcement, there were many nervous hoteliers and hotel investors. But at least on the transactions side of the hotel industry, there were few surprises which would prevent hotel investment.
“We did see a reduction in fourth-quarter transactions as investors paused and waited to see, as with most budgets, what it would contain. That is financially prudent, but now it has been delivered, the sentiment is pretty positive. Now we have certainty,” she said.
Nervousness over the U.K. budget extended to foreign investors, who still look at the U.K. as a safe market and one that is a beneficiary of the U.S. tariff policy, Wild said. She agreed it's taking longer for hotel deals to cross the finish line.
“With the budget announced at the end of year, it was always going to be tight to have deals announced before the end of the year. Transactions are taking a little longer, with a focus on due diligence, and financing is taking time,” she said.
But there are plenty of reasons for “cautious optimism,” she said.
“I was quite upbeat at the start of 2025, following the high transaction figures seen in 2024, which were dominated by portfolios. 2025 was the return of the single-asset transaction, but, overall, it’s not been as strong, and I’ll be surprised if [in full-year 2025] we hit 2024 numbers,” she added.
Due diligence
The U.K. government's November budget emphasized the need for further due diligence in deal underwriting, Hills said.
“Business rates were a notable feature of the budget, and they will be a real feature on U.K. transactions,” Hills said. “Hoteliers, for example, will need to offset them by building revenue, and of course you have to apply a yield to that, which can have an impact on price, a pretty significant one. When values change, that leads to opportunities for some, but not for others.”
Concerns around business rates are genuine, Wild said. The big question is whether the increased business rates and employee costs can be mitigated with artificial intelligence and other technology.
Higher costs from business rates and National Insurance contributions will further jolt profit and loss statements from April, Hills said.
“Hoteliers need to continue to squeeze efficiencies, but how many efficiencies are left?” she asked.
The depth of underwriting has grown, Wild added.
“Hoteliers require a genuine understanding of the asset they are buying and the risks involved. [A deal] can be easier to stack up if you are a longer-term hold. We’re seeing people spending a lot of money on due diligence and still saying no,” she said.
A major catalyst for U.K. hotel deals is that the finance side is booming, Wild said.
“It is highly competitive, and it includes the usual suspects. The U.K. banks have done a lot of transactions, and we are also seeing an increase in financing from insurers and debt funds. The German banks are also very competitive,” she said. “We are seeing a lot of hotel refinancing, but less acquisition financing. Hotel owners are swapping lenders, and we’re not seeing much development financing as construction costs remain expensive.”
Hills said private equity is in the market for hotels, as are cash buyers.
“Private credit is very attractive, and we’ve seen more refinancing because the terms are good. There is a lot of money looking to find an appropriate risk-adjusted means to enter the industry. There are a number of funds that need to raise money, and that is challenging,” she said.
In it to win it
U.K. and Irish hotel investors should see acquisition opportunities in 2026, Wild said.
“Hotels will be put on the market. Hotels are seen as being inflation-busting. Expect private equity capital, high-net-worth individuals and family offices to be involved,” she said.
Major portfolio deals will most likely see partners coming together to get a deal done, Hills said.
“We’ve also seen a rise in the number of joint ventures across a number of areas, not just in hotels. This will often be a combination of money and expertise, the [operating company], the [property company],” she said. “Flexibility and nimbleness continue to be important. The search is on for [real estate] that can be repurposed efficiently,”
She added she expects a focus on hotels with leases in the southeast of England.
Hills said the €1.4 billion portfolio sale of Dalata Hotel Group to Pandox AB and Eiendomsspar stood out as the hospitality deal of 2025.
https://www.costar.com/article/2024714905
The July 14 deal saw the two Scandinavian partners agree to an updated cash offer of €6.45 ($7.54) per share. Scandic Hotels, a long-term partner of Pandox, has been chosen to manage the portfolio.
"We’ve seen a lot of single assets being transacted, but the Dalata deal bucked the trend," Hills said.
Hills’ work on that transaction was the “most fun of my professional life to date. It was a fascinating deal, working with the dynamics of that transaction and being able to help the client secure the deal,” she said.
“Pandox had long admired Dalata. It also acquired the Jurys Inn portfolio, and the Dalata portfolio complemented their existing portfolio,” she said.
U.K. hotel portfolio transaction volumes fell in 2025, according to business advisory Savills. Full-year U.K. hotel deal volume totaled £750 million ($1 billion), “materially lower than the £3.1 billion recorded in 2024. But activity in the single-asset market strengthened significantly, accounting for 85% of investment volumes last year, up 68% year‑on‑year,” according to CoStar News’ Luke Haynes.
Another potential headache is the U.K. government’s decision to allow mayors of cities to be the ones responsible for applying bed taxes, an additional cost that has not traditionally been part of the U.K. and Irish hotel industry.
“New U.K. city levies on rooms will clearly have an impact on the consumer,” Wild said,
She added that for certain hotel segments, such as luxury, the levies could be more easily absorbed than the budget segment where they would have a more material effect.
“Tourists benefit from exchange rates, but I think the revenge-travel boost is likely to taper off. It’s all out our systems by now and some hotel guests will be focused on cost-of-living increases,” Wild said. “Inflation is getting better … but consumers are being cautious about where to spend their cash. People are going out less, and restaurants and pubs are closing.”
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