In Brief: Commercial strategy executives met in San Antonio last week at the Hotel Commercial Strategy Executive Roundtable to discuss market performance, consumer behavior, and forecasting.
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Hotel Commercial Strategy Executives: Cautious Optimism, Uneven Reality – Image Credit HSMAI
Last week in San Antonio, commercial leaders gathered for our first ever Hotel Commercial Strategy Executive Roundtable. It was a full room, and the result was a rich discussion. The first half of the year was broadly strong, with many attendees beating budgets, and they all saw solid RevPAR growth. The economist session at CSC landed more optimistic than expected, though the confidence still has edges.
“Waiting for the shoe to drop” was the overarching sentiment in the room and in a survey pre-event. The strong stock market and good numbers feel fragile, while geopolitical uncertainty, including the Strait of Hormuz and global instability, make the rest of the year feel volatile.
Segment Divergence — The K-Shaped Reality
As one attendee pointed out, gas prices are the #1 demand driver for economy and midscale, with correlation confirmed via regression and Bayesian modeling. Recent weeks show demand softness in some pockets tied to fuel costs.
Luxury and upper-upscale are largely insulated. Stock market equity gains are driving leisure demand, and resort ADR continues to grow, while college-town hotels are seeing record attendance. However, there was caution against broad macro-optimism. Impact varies by chain scale and consumer type, with the lower and mid-tier properties not fairing as well.
Consumer Behavior Shifts
Loyalty point redemptions are surging. So, while consumers are still traveling, they are substituting points for cash spend. Guests are absorbing gas costs and offsetting it by using free nights. This is seen in both drive-to destinations and at leisure destinations where length of stay is down, while redemption volume is up.
World Cup summer travel is still a concern for upper-midscale properties as the on-the-ground demand is still not matching projected levels.
AI, Alignment, and the Commercial Stack
AI continues to be ubiquitous in conversations, with the discussion shifting to real use cases across revenue management efficiency, search optimization, booking engine chatbots, sales prospecting, contact center automation, and marketing deployment.
Another universal commercial point was alignment. Many attendees’ questions focused on integrating sales, revenue, marketing, and operations, ownership expectations, and how teams are structured. Talent and training surfaced alongside AI, especially as it shifts entry-level roles and bench strength. While marketing inputs focus on cost of acquisition, tech stack constraints, attribution, GEO, and balancing OTA spend with direct investment. Sales inputs focus on workflow automation, lead response, incentive structures, and GM engagement.
Outlook and Forecasting
There was broad skepticism around second-half forecast strength despite strong first half of the year momentum. Forecasting and budgeting are now effectively a 24/7 exercise. Across commercial, labor costs stay a persistent pressure.
Though summers are historically slow and there is a strong dose of skepticism in a strong H2 economic outlook, attendees were optimistic for conferences and conventions returning post-summer.
Thank you to the companies sponsoring this roundtable Dragonfly Strategists, Lotus Marketing, and Milestone. This Roundtable was attended by people from companies such a as Atrium Hospitality, By the Sea Resorts, Castle Resorts & Hotel, Concord Hospitality, Coral Tree Hospitality Group, CoralTree Hospitality Group, Cote Hospitality, Dimension Hospitality, Drury Hotels, Extended Stay America, Graduate Hotel, IGH, Kampgrounds of America, Kasa, MCR Hotels, Omni Hotles & Resorts, OTO Development, Peachtree Group, Pyramid Global Hospitality, Red Roof, Sage Hotel Management, Sandman Hotel Group and Sutton Place Hotels, Stonebridge Companies, VAI Resort, Venetian Las Vega, Voss Hospitality, and Wyndham Hotel & Resorts.
HSMAI hosts this unique by-invitation forum annually for executives from ownership groups who specialize in a commercial role at their company. If you are interested in being invited next year, please email HSMAI.
