Midscale hotels have suffered in the K-shaped economy. Marriott says that’s changing.
Midscale hotels have suffered in the K-shaped economy. Marriott says that’s changing.
https://hotelsmag.com/news/midscale-hotels-have-suffered-in-the-k-shaped-economy-marriott-says-thats-changing/
by David Eisen
The K-shaped economy, one marked by strong spend at the top end and softer spend in the middle, has been a boon for luxury hotels and a drag on midscale, select-service properties. The tide, however, is changing, according to Marriott International. It said as much on its first-quarter earnings call.
RevPAR in the quarter increased 4.2% worldwide, with 4% percent growth in the U.S. & Canada and 4.6% growth in international markets. (For comparison, global RevPAR at Hilton increased 3.6% in Q1 compared to the same time a year ago.) While luxury RevPAR rose nearly 7% in the quarter, select-service RevPAR increased 3.5%, in what Marriott International President and CEO Tony Capuano called “meaningful improvement” from the fourth quarter, when select-service RevPAR was down more than 1% year over year.
“Across demographics, we continue to see a prioritization of travel and experiences over consumption of hard goods,” Capuano said. “Even in lower-income households, you’re seeing that shift, and that’s having a pretty materially positive impact on the performance of our select-service brands.”
In Development
On the development front, new construction of hotels has remained well below the per-annum average. It makes sense: higher interest rates put a pause on new development since they make it more expensive to finance projects. Meanwhile, hotel companies have pushed out new brands and retrofitted others to take advantage of the conversions trend—taking an existing property, typically under a rival brand, and transforming it under the new brand.
Conversions remain a major focus for hotel companies, and that focus doesn’t appear to be abating. At the end of the first quarter, Marriott reported that its worldwide development pipeline reached a new record and totaled over 4,100 properties and nearly 618,000 rooms, with 43% of pipeline rooms under construction, including hotels that are pending conversion. Conversions, including multi-unit deals, remained a significant driver of growth for Marriott in Q1, representing over 35% of signings and over 40% of openings in the quarter.
Capuano said that a concerted effort was being made by its development teams to chase down larger portfolio-conversion opportunities. “The runway for growth and for conversions, in markets like Europe, where you’ve still got a very significant portion of the lodging supply that is independent, is fertile hunting grounds for us,” Capuano said.
First-quarter deal signings increased 9% year over year. Marriott added roughly 15,900 net rooms globally during the quarter and net rooms grew 5% from the end of the first quarter of 2025. Expectations are for net rooms growth between 4.5% and 5% for the year.
Middle East Drag
Conflict in the Middle East showed up in Marriott’s hotel performance in March, with RevPAR in the region declining 30%. Overall, international RevPAR grew 4.5% in Q1 compared to the same time a year ago. “Middle East travel corridor disruption started to impact select APAC markets, including India and the Maldives,” Capuano noted.
First-quarter RevPAR in EMEA increased over 3% with increases in Europe and Africa partially offset by a decline in the Middle East. RevPAR in Europe Rose 4% as the impact of the conflict in the Middle East on European markets was relatively minimal, Capuano said, and largely contained to countries near the Middle East, such as Cyprus and Azerbaijan.
In the first quarter, leisure RevPAR rose 6% globally and group RePAR rose 5% both globally and in the US and Canada. Q1 business transient RevPAR rose 1% globally.
Despite warnings about soft hotel bookings ahead of the World Cup, Marriott said it expects 30 to 35 basis points of global RevPAR lift from the event.
Marriott said it was raising its full-year global RevPAR guidance and now expects growth of 2% to 3%.
In March, Marriott International announced a partnership with European wellness brand Lefay to bring it into the Marriott portfolio.Tech Moves
Marriott continues to roll out its technology platform to hotels, having now transitioned its 1,000th hotel over to its new tech ecosystem, which, Capuano said, automates multiple processes that used to be done manually. Artificial intelligence continues to be a focus. The company is rolling out AI-powered desktop assistance at its customer engagement centers and using AI for guest pre-arrival communications. “As AI platforms continue to enrich the trip-planning experience, we believe our unparalleled depth of inventory and global reach are significant competitive advantages,” Capuano said. “While it’s early days for travel searching and planning and AI, we believe AI presents an exciting opportunity to connect directly and in a more personalized manner with our customers.”
Marriott said it is beginning a phased rollout of a natural language search experience on Marriott.com and within its app by the end of the second quarter. “This experience will leverage real-time inventory to respond to guest inquiries and help them explore our portfolio more easily,” Capuano said.
The Marriott Bonvoy loyalty program had nearly 283 million members as of the end of March.
How Do You Choose Between Visiting Greenland or Iceland?
Mumemories/Shutterstock
https://www.fodors.com/news/photos/greenland-vs-iceland-which-destination-is-right-for-your-trip
Trying to choose between Greenland and Iceland? Here’s how they compare for adventure, crowds, culture, road trips, and travel style.
Some people believe that Greenland is simply a less-crowded version of Iceland. That’s an easy assumption to make, given that the countries are only two hours apart and have many similarities.
Significant portions of the neighboring islands are covered in ice; both are great places to see the northern lights or experience the midnight sun, and each is teeming with whales, birds, and other wildlife.
Iceland’s stunning waterfalls, ubiquitous hot springs, volcanic hikes, and wildlife—from puffins to whales—draw me to the country again and again. My love for Iceland runs so deep that I traveled there three times in the last year alone. This year, however, I decided to visit Greenland instead and was surprised by how different the island-nations are from one another.
Here’s how to decide which one is right for you.
PHOTO: MURAT4ART/ISTOCK
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Greenland Is Better for Remote Exploration
Greenland isn’t far from Iceland, but up until recently, it was much harder to reach. In 2024, a new international airport opened in Greenland’s capital, Nuuk, and in recent years, expedition cruise lines started offering more sailings to the country.
Still, Greenland feels more remote. Compared to Iceland, the country “remains less crowded and more of a true expedition destination,” explains Karin Strand, vice president of expeditions development at HX Expedition, which sails to both Greenland and Iceland, and executive committee chair of the Association of Arctic Expedition Cruise Operators.
During my trip, I was left with the feeling that this is the golden age of Greenland travel. The country receives enough visitors each year that there are sufficient flights, cruises, hotels, restaurants, and tours to make travel at different price points and activity levels not only possible, but comfortable. Yet, Greenland still feels unexplored and wild compared to Iceland. In Greenland, it’s still possible to spend a day or more without seeing any other visitors, which is something I haven’t experienced anywhere else in the world.
Anyone after a quieter environment with a true expedition feeling should choose Greenland. Exploring Greenland felt novel and new, in a way that’s hard to replicate anywhere else. If you have ever wistfully thought about what it would have been like to visit a destination before it became popular, plan a trip to Greenland before it’s too late.
PHOTO: MIKAEL SVENSSON/ISTOCK
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Greenland Is a Must for Adventure Seekers
Although a persistent belief is that Iceland is green and Greenland is icy, that isn’t quite true. Depending on the time of year you visit and where you go, it’s possible to find ice-covered peaks and green fields in both countries. However, it is true that 90% of Greenland is covered in ice compared with Iceland’s 11%. That makes ice one of Greenland’s main attractions in the best possible way.
Greenland’s vast ice sheet, the largest in the world outside of Antarctica, creates vast fjord systems and some of the world’s largest icebergs, Strand explains.
“Places like Ilulissat Icefjord offer towering ice, which is something you simply do not experience in Iceland in the same way,” she explains.
In Greenland, I hiked for hours on the Russel Glacier and walked on the Greenland Ice Sheet, parts of which are believed to be over a million years old. I also saw massive icebergs on hikes and boat rides, experiences which were more like those I had in Antarctica than anywhere else in Europe, including Iceland.
From camping on the ice cap to dog sledding and sailing through glacier-lined fjords on an ice breaker, opportunities for adventure are endless in Greenland. Moreover, many of these adventures are hard to replicate anywhere else on earth, especially in the same place. Albatros Arctic Circle has experience planning adventures throughout Greenland.
PHOTO: MURATART/SHUTTERSTOCK
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Greenland Is Better for Slow Travel
Greenland is a perfect destination for those seeking slow travel. No roads connect Greenland’s towns, so visitors must fly on a small plane with Air Greenland, sail, or take a helicopter to get from place to place. Other than northern-lights hunting followed by a glass of Greenlandic Coffee spiked with Grand Marnier or watching the midnight sun, there isn’t much of a nightlife in most Greenlandic towns.
The lack of developed infrastructure and a still-new tourism industry make travel in Greenland feel slower, more immersive, and more intentional by default.
PHOTO: MADS PIHL - VISIT GREENLAND
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Greenland Has a Wealth of Indigenous Culture
Unlike Iceland, Greenland’s original settlers were not Norse Vikings. Instead, they were Inuit who traveled over a frozen land bridge from Canada.
“Culturally, Greenland remains deeply connected to Inuit traditions, where hunting and fishing are still an essential part of everyday life,” Strand says. “In many communities, these practices are not just cultural heritage but a way of sustaining families and preserving knowledge passed down through generations.”
During my trip to Greenland, I enjoyed learning about Inuit traditions, such as never whistling under the northern lights lest you attract the attention of the spirits, exploring a UNESCO-protected site where the Inuit once lived near the sea, and hunting Musk Ox for survival. I also traveled to a remote modern-day settlement where descendants of Greenland’s original settlers live today, blending old and new traditions.
“Greenland offers a unique blend of Inuit heritage, Norse history, and contemporary Arctic life, which together shape a living culture that is both diverse and deeply rooted in place,” explains Ann Sophie Dorph Andersen, a spokesperson for Visit Greenland who has Greenlandic heritage.
PHOTO: MURAT4ART/ISTOCK
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How to Get to Greenland
Travel to Greenland is now easier than ever. Icelandair offers several flights a week to Nuuk. Air Greenland offers flights to Greenland from Copenhagen. United Airlines offers seasonal flights from New York to Nuuk. Because traveling around the country can be difficult, an expedition cruise, such as one offered by HX Expedition, is a good choice. HX offers several options, including one that leaves from New York.
PHOTO: HAUKUR SIGURDSSON
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Iceland Is Better for Road Trips and Solo Exploring
Many travelers to Iceland enjoy traversing the country on their own. Unlike Greenland, where visitors are prohibited from renting cars in some towns due to dangerous road conditions, Iceland is the perfect choice for travelers who want to explore the country independently.
Iceland’s Golden Circle and Ring Road are both popular routes. The Golden Circle is a one-day drive featuring several of Iceland’s most popular sites, including a national park, a massive waterfall, and a geyser. The Ring Road is a longer highway that circumnavigates the country, taking visitors past waterfalls, black-sand beaches, volcanoes, fjords, and small towns. Other visitors rent a car or campervan for a day or weeks at a time to create custom itineraries.
Iceland is the better choice for independent travelers who want to traverse the country on their own terms.
PHOTO: BASICZTO/ISTOCK
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Iceland Is Better for Spontaneous Travel
Iceland’s well-developed tourism industry also means it’s easier to be spontaneous. In Iceland, getting from place to place requires less planning. Moreover, because Iceland’s tourism industry is firmly established and the country has more inhabitants than Greenland, it’s easier to book hotels and tours at the last minute.
Although we still recommend booking as much as possible in advance, it’s far easier to be spontaneous in Iceland than in Greenland. Travelers who prefer to follow their whims rather than create a detailed itinerary will likely have a better time in Iceland.
PHOTO: SUMMIT ART CREATIONS/SHUTTERSTOCK
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You Can’t Beat Iceland’s Hot Springs
One of my favorite parts about visiting Iceland is spending time in the country’s natural hot springs and thermal pools. Several places in Iceland, such as the Sky Lagoon, incorporate naturally occurring hot springs into wellness experiences that include saunas and cold plunges. Other geothermal hot springs, such as the Blue Lagoon, offer add-ons such as massages or meditation.
Iceland’s naturally warm waters are created by volcanic activity and shifting tectonic plates, which are not present in Greenland. Although I enjoyed my visit to Greenland very much, I missed soaking in hot springs, especially after a long day of hiking. Anyone hoping to visit hot springs or experience a Nordic wellness ritual should choose Iceland.
PHOTO: GALYNA LUNINA/ISTOCK
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Iceland Has Better Geographic Diversity
Because nearly all of Greenland is covered in ice, it lacks the geographic diversity of Iceland. Greenland has some geographical features aside from ice, including a few waterfalls and meadows, but not on the same scale as Iceland.
In Iceland, it’s possible to hike on glaciers and visit ice caves. However, the country also has an abundance of massive waterfalls, volcanoes, national parks, and geothermal hot springs. Travelers seeking a more varied experience will likely prefer Iceland.
PHOTO: MURATART/SHUTTERSTOCK
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Iceland Has More Nightlife and cultural activities
Iceland’s capital, Reykjavik, is a lively European city. Although small, Reykjavik has an abundance of cafes and restaurants and a thriving nightlife. The city’s bars include an upscale speakeasy, a traditional British pub, and one that pays homage to the cult-classic movie The Big Lebowski. Elsewhere in the country, local restaurants and hotel bars serve as a hub for nightlife, although it’s not quite as lively as in Reykjavik.
Reykjavik also has a surprising number of museums, including several art museums, a museum dedicated to telling the story of Iceland’s original settlers, and quirky options, such as a phallic museum, a punk rock museum, and a museum where all exhibits are made from synthetic hair.
Although Greenland has some small bars and museums, the nightlife and culture don’t come close to what I experienced in Iceland. Travelers who want a robust nightlife and the ability to museum-hop will likely be happier in Iceland.
PHOTO: WENILIOU/ISTOCK
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How to Get to Iceland
The easiest way to get to Iceland is to fly Icelandair, which operates from over 20 airports in the United States.
If you still can’t decide whether Greenland or Iceland is right for you, consider a trip that takes you to both countries.
Combine a trip by taking an expedition cruise that sails to Iceland and Greenland. Or take advantage of Icelandair’s stopover program and spend up to a week in Iceland en route to Greenland.
Saudi Arabia is scaling back some lofty development plans, but hotel investors remain all-in
Hoteliers take long view on the kingdom, despite pressures from war in Iran
Saudi Arabia, Al Madinah Region, AlUla or Al Ula, landscape around the city of AlUla oasis (Getty Images)
https://www.costar.com/article/2057998141/saudi-arabia-is-scaling-back-some-lofty-development-plans-but-hotel-investors-remain-all-in
Saudi Arabia's lofty Vision 2030 strategy for major tourism, hospitality, and entertainment investment has lost a bit of its sparkle, but hoteliers are confident that the long-term prospects for the burgeoning hotel industry there are solid.
Consistently low oil prices before the current war in Iran slowed down some of the ambitious hotel and entertainment giga-projects promised in Vision 2030.
Now, the U.S.-Iran war is putting more pressure on energy prices, supply chains, airline service and other hospitality sector components and requirements.
But despite shifts and setbacks, hoteliers investing in Saudi Arabia are confident in the long-term strategy of the country's ruling officials to build economy-boosting tourist hotspots across the country, with the goal of lessening its dependence on oil in the long run.
Frank Veenstra, chief development officer at Kempinski Hotels, said he has 20 hotels in the region, and another nine in the pipeline, within a total portfolio of approximately 95 hotels.
“It is a major share, and we’re there for the long run," he said, speaking at the International Hotel Investment Forum EMEA in March. "There are meaningful impacts and risks in the short run, also to destinations affected by travel from the region. But there is confidence."
Other major brands spoke in March, sharing that confidence.
Carlos Khneisser, chief development officer, Middle East and Africa at Hilton, said the long-term future of the flourishing Saudi Arabian hotel industry is sound.
“Most of our hotel agreements are 20 to 25 years in length, the area is resilient, and Hilton is 105 years of age,” he said.
Hilton's Middle East portfolio includes 100 hotels in Saudi Arabia, with another 20 in the pipeline.
A new Saudi law on foreign ownership will open more doors, he said, adding the government is targeting $100 billion of foreign investment by 2030.
Current challenges
But the acute pain of the current war is causing Saudi Arabia to pump the brakes and even halt some projects.
Higher oil prices erode demand (exacerbated by the blockade in the Strait of Hormuz), which results in less revenue to fund giga-projects and the redirection of what capital there is into other government departments, not into the kingdom’s sovereign wealth fund.
Just last week, Saudi Arabia's Public Investment Fund scrapped its funding of the LIV Golf tournament, which it launched in 2022 with a roster of top players and a multibillion-dollar investment, citing a focus on "increasing the efficiency of investments."
In the PIF's latest revision to Project 2030, issued last month, the fund is still seeking to develop 100,000 rooms and 70 tourism experiences in the kingdom.
That is a scaling back of original plans, which has been happening for a while, CoStar News first reported in September.
Moving on
But scale-backs, particularly of such lofty and ambitious projects, are to be expected, say industry watchdogs, and hotel investors are not staying away.
Tariq Bsharat, chief strategy and business development officer at Marjan, said back in March that his firm is still transacting, and partners are still willing to spend. He said one project he is involved in is an integrated resort with a large gaming floor, which is on track to open in spring 2027.
Luc Boschmans, director of asset management at Red Sea Global, also said in March that the 24 hotels in the Red Sea Global giga-project are on track. While he has seen concerns from international guests and groups, lost demand has been replaced with local demand.
Khneisser said the Red Sea area of Saudi Arabia is attracting capital from Malaysia, Indonesia and Singapore, especially assets close to the Holy Cities.
As of March, the war in Iran was inciting caution from investors, but they weren't unduly alarmed.
Marjan Bsharat said the start of the U.S.-Iran war saw a brief pause of two days in construction. Marjan is a master developer of the project, and Bsharat is working with $2 billion in land value over six deals.
Dimitris Manikis, president, Europe, Middle East, and Africa at Wyndham Hotels & Resorts, said the litmus test for any region is always confidence.
“That comes from all players in any deal, and from the guests who want to travel,” he said.
He added that everyone still wishes to be in the region.
“You are either late to the party or early to it, but the important thing is that you were invited. Operators, locals, and brands need to stay loyal to the destinations," he said. “A lot of what you will see in hospitality in the next five years is already being tested and used in Saudi Arabia.
“If [anyone] moves out, they will regret it in five years’ time,” he added.
Khneisser pointed to Saudi Arabia's "world-class" safety and security, ease of doing business, and "second to none" facilities and service.
Veenstra reiterated that owners, seeing that occupancy would fall across the Middle East as a result of the war, accelerated CapEx plans.
He added segmentation in Saudi Arabia, and the region is also seeing a little transformation.
“The midscale will come, although luxury is the push, traditional luxury that establishes place-making, if you will," he said. “There is more demand for experiences at a luxury level, and we see that as a major interest from investors."
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