The Issues HSMAI Advisory Board Members Are Tracking

When we asked our Advisory Board Members what new and emerging issues they were thinking about and tracking, they focused in on the following key issues:

Market Performance and Concerns: There are significant concerns about Q4 performance, with diminishing leisure pace and eroding ADR (Average Daily Rate). Upper midscale and below segments are struggling, while luxury and upper upscale segments are performing relatively better but still face challenges. Growth projections have been revised down from 4-4.5% to 2-3%, with missing transient business identified as a key factor in underperformance.

Economic Factors: Inflation is recognized as a significant issue affecting the industry. Interest rate cuts are anticipated, but their impact remains uncertain. There is a shift towards international travel for U.S. residents, reduced consumer confidence, and spending power. The economic impact of the election year is also a concern.

2025 Outlook and Budgeting: Despite challenges, some markets show positive intentions for 2025. However, there is uncertainty about how current trends will affect 2025 performance, making accurate forecasting difficult.

Booking Trends: Booking windows have shortened significantly, with current booking windows around 30 days, down from 60-90 days. There is a trend towards last-minute bookings for better deals, which the industry has inadvertently cultivated.

Group Business: Declining group volume and short-term, in-the-year-for-the-year opportunities are decreasing. There are concerns about how short-term trends will affect 2025 bookings, although there are some positive signs for Q1 group bookings in Florida. Contract negotiations face significant pushback on cancellation and attrition clauses, with clients reluctant to commit to penalties.

Industry Challenges: There is downward pressure on pricing and a return of post-recession “bad habits” in yield management. An increase in last-minute promotions and discounts to fill inventory is noted. Political factors and economic uncertainty are contributing to consumer unease, affecting both transient and group bookings. Additionally, entry and early sales career salaries and titles are inflating, leading to rampant job hopping and short tenures.

Technology, AI, and the Internet: The industry is grappling with several emerging issues including the transition to GA4 and cookies. Cybersecurity and data privacy remain critical, highlighted by incidents like the Crowdstrike and Omni data breaches. Additionally, understanding AI and leveraging it to summarize data and extract insights is becoming increasingly important, as is integrating and utilizing AI effectively in operations. There is a growing interest in understanding how SEO is influencing AI.

This article originally appeared on HSMAI.