Headline Hotel CEOs Split on 2025 Outlook as Leisure Softens and Group Travel Holds

Public hotel companies delivered a patchwork of results in their latest earnings season, underscoring a split view on the year ahead.

By HNR News Staff Reporter

• Publicly traded hotel groups delivered mixed earnings and diverging outlooks.
• Executives cite “normalizing” U.S. leisure demand but steady group and business travel.
• Development pipelines remain large, but financing and opening pace are sticking points.
• Industry data points to slower, steadier RevPAR growth and intensifying rate sensitivity.

Mixed scorecards set a contradictory tone

Public hotel companies delivered a patchwork of results in their latest earnings season, underscoring a split view on the year ahead. Executives widely described U.S. leisure demand as normalizing after a multi-year surge, while pointing to resilient group and business transient segments and steadier international demand. The contradiction was most evident in outlooks: some management teams leaned upbeat on pricing power and corporate/group recovery, while others turned more guarded on rate sensitivity and midscale leisure softness.

Leisure cools, group steadies — and executives choose their emphasis

Marriott International’s tone skewed constructive. “Leisure demand is normalizing, as expected, while group and business transient remain healthy,” CEO Anthony Capuano said on a recent earnings call, noting continued strength in large events and corporate meetings alongside steadier weekday demand. Hilton Worldwide struck a similar note on rates and cross-border travel. “We feel very good about the demand backdrop globally,” CEO Chris Nassetta told investors, adding that “rate integrity has been strong” even as domestic leisure growth moderates.

Hyatt, with greater exposure to luxury and lifestyle, highlighted the resilience of high-end travelers and the international recovery. “The high-end consumer remains healthy and engaged,” CEO Mark Hoplamazian said, citing sustained interest in experiential travel and destination resorts.

By contrast, companies oriented more toward U.S. midscale and economy rooms signaled caution. “Our core midscale guest is more price-sensitive today,” Choice Hotels CEO Patrick Pacious said, pointing to tighter household budgets and competitive pricing pressure in select drive-to markets. Wyndham Hotels & Resorts flagged a similar trend. “We’re seeing softness in U.S. leisure demand compared to the last two summers,” CEO Geoff Ballotti said, even as he highlighted franchisee interest and strong signings.

Data: slower, steadier RevPAR and rising rate sensitivity

Industry trackers say the pattern fits a late-cycle normalization. “The U.S. hotel industry is moving into a slower-growth phase as comps get tougher and leisure normalizes,” STR President Amanda Hite said in a recent market update from CoStar’s hospitality analytics unit, adding that group demand has been a relative bright spot. Analysts also note a flattening of occupancy and modest average daily rate (ADR) gains in the U.S., with international markets and higher-end segments providing a firmer backdrop.

Corporate travel budgets—especially among large enterprises—have improved gradually, aiding weekday demand in major metros. Group bookings continued to refill citywide calendars, with several brands reporting robust forward pacing for meetings and events. Marriott, for instance, described group as a “pillar” of its outlook, while Hilton cited intense corporate negotiations and solid rate renewals into next year.

Supply, development, and the capital constraint

Despite near-record pipelines, executives acknowledged that higher financing costs and bank selectivity continue to slow openings. “Our pipeline remains at record levels, but the pace of conversions and new-builds is gated by the lending environment,” Wyndham’s Ballotti said. Choice’s Pacious echoed that development remains a share-gain opportunity—particularly in conversions and extended-stay—yet acknowledged that closing deals can take longer in today’s credit conditions.

Internationally, brands continue to lean into asset-light expansion, with management and franchise agreements offering capital-efficient growth. Hyatt emphasized pipeline momentum across lifestyle and resort flags, while IHG pointed to steady signings in EMEAA and China offsetting a more moderate outlook in the Americas. “We expect industry growth to moderate in the Americas, even as our global pipeline supports long-term expansion,” IHG CEO Elie Maalouf said.

Margins, costs, and the rate vs. occupancy trade-off

Operating margins remain in focus as wage and insurance costs edge up and rate growth settles. Hilton’s Nassetta said the company remains disciplined on pricing. “Rate has held up well,” he noted, pointing to continued segmentation and revenue management as keys to protecting profit flow-through. Marriott’s Capuano signaled a similar approach, emphasizing mix management—keeping group and business transient yields healthy while allowing leisure to right-size.

On the other side, midscale-oriented systems face sharper elasticity. “Value matters more than ever to our guests,” Choice’s Pacious said, noting promotional tactics and targeted discounting in shoulder periods. Several companies said they are leaning on loyalty program enhancements and direct-booking tools to reduce distribution costs and keep demand in-brand.

What’s next: bifurcation to persist

If there was a consensus, it was that bifurcation—by segment, price point, and geography—will define the next several quarters. Executives broadly expect:

– Leisure to trend closer to 2019-style seasonality, with less outsized summer peaks.

– Group and business transient to pace steadily, helped by corporate budget cycles and citywide calendars. 

– Rate growth to moderate but remain positive in higher-end and international markets.

– Development to stay resilient on signings, with openings gated by financing conditions.

“The world wants to travel,” Hilton’s Nassetta said, reiterating his long-term demand view even as near-term growth normalizes. Marriott’s Capuano framed it more pragmatically: travel demand remains broad-based, but performance will increasingly depend on mix management and where brands are positioned across the demand spectrum.

Credible industry sources reinforced the point. “We’re in a period where fundamentals are fine, but dispersion is widening,” STR’s Hite said. For investors, the takeaway from this earnings season is clear: the cycle isn’t turning down so much as spreading out—stronger for group and higher-end, more competitive for midscale leisure—leaving hotel companies to choose their posture accordingly.