Hotel CEOs Rely on ‘Certainty’ for Steady Business Travel Growth

• Hotel industry analysts project a modest improvement in corporate transient demand for hotels in 2025, hinging on corporate profit growth and stock market performance.
• Hotel industry executives express optimism about potential deregulation and business confidence under a Trump administration but harbor concerns about the unpredictability of policies such as travel bans.

The hotel industry is cautiously optimistic about the future, particularly corporate travel growth. Recent discussions at the Americas Lodging and Investment Summit in Los Angeles saw analysts and top executives from major hotel companies outlining their predictions and concerns for the coming years.

Ryan Meliker, president and co-founder of Lodging Analytics Research & Consulting, suggested that corporate transient demand for hotels will see “modest improvements” in 2025. Meliker’s analysis is largely based on corporate profit growth, which is expected to dip into negative territory in 2025, and the stock market, which is not expected to grow at the same rates seen in previous years. However, these obstacles may be offset as more companies begin to return their employees to office settings, keeping the segment in positive territory. Furthermore, convention center data indicates a 5% year-over-year increase in group demand for 2025, following a 4% increase in 2024.

Industry-wide, STR president and CEO Amanda Hite suggested that expectations for 2025 have remained relatively stable. STR projects a 1.6% year-over-year increase in the U.S. average daily rate, with revenue per available room up by 1.8%. The luxury segment is expected to maintain “good demand”, with two-thirds of luxury hotels seeing demand increases in 2024. Meanwhile, upper upscale hotels are predicted to have a “solid, consistent performance”. The midscale segment, however, is grappling with supply growth, while economy hotels will see positive RevPAR growth amid negative supply growth and stronger-than-expected demand.

Cindy Estis Green, CEO and cofounder of Kalibri Labs, offered a slightly more optimistic outlook, projecting 2025 U.S. RevPAR growth in the range of 1 to 3% year over year. However, Green also cautioned that hotels will see expenses increase in the 5 to 10% range, requiring a critical focus on expenses, including distribution costs.

At the same summit, a panel of hotel CEOs expressed optimism about U.S. industry growth under the Trump administration, though they also voiced concerns. Hilton Worldwide CEO Christopher Nassetta suggested that the industry could benefit from “certainty” around regulations and labor that might encourage businesses to increase spending. He also noted that there has been some increase in demand since the election. Similarly, Wyndham Hotels & Resorts CEO Geoffrey Ballotti hoped the Trump administration would be more open to the business community’s concerns.

However, there are also concerns about the Trump administration’s policy unpredictability, particularly around international relations and travel. Marriott International CEO Anthony Capuano raised concerns about the potential impact of tariffs and travel bans, emphasizing the need for a clear and dedicated focus on the economy to benefit the industry.

While hotel industry leaders are hopeful about potential growth and deregulation under the current administration, they also express concern about the unpredictability of travel and international relations policies. Thus, the forecast for 2025 remains cautiously optimistic, though dependent on a range of external factors.