Majority of Hoteliers Scaling Back Development Plans

Rising costs and softening demand leading to pullback, according to AHLA member survey

Rising costs and uneven demand challenges are placing a significant strain on hotel investment and operations, according to a new survey conducted by the American Hotel & Lodging Association (AHLA), the leading voice representing all segments of the hotel industry. The survey, conducted in late August, featured input from nearly 400 hotel property owners and operators nationwide.

Development and renovation plans remain under pressure, with 32% of respondents delaying projects, 24% scaling back, and 8% canceling entirely. Only 8% of property owners and operators reported moving forward with new investments. Nearly half of the respondents (49%) also reported being understaffed, underscoring ongoing workforce challenges that add to financial uncertainty.

On the demand side, respondents report that leisure travel continues to soften, with 30% of hotels seeing declines in completed leisure stays and 26% reporting drops in upcoming bookings compared to the same period last year. Business, group, and government travel also showed softness, with 15–17% of properties reporting decreases.

“Hotels are eager to invest in their properties and communities, but rising costs and uncertain demand are forcing many to put projects on hold,” said AHLA President & CEO Rosanna Maietta. “It’s been a tough year for hotel operators, especially our small business owners. As Congress gets back to work, we’ll be focused on advancing policies to spur travel and ease operational pressures, and provide our industry the certainty it needs to grow, create jobs, and strengthen local economies nationwide.”

The survey was conducted between August 21 and August 29, and included input from 387 property owners and operators. Taken together, the results illustrate an industry still grappling with cost pressures and shifting demand patterns while working to maintain operations and plan for the future.