Dive Brief:
- Rising costs and demand challenges are causing strain on hotel owners nationwide, leading a significant portion to delay or cancel development and renovation projects, according to an August survey of nearly 400 hoteliers conducted by the American Hotel & Lodging Association.
- Some 32% of respondents to the survey said they are delaying projects amid economic uncertainty, while 24% report scaling back investment into their hotels and 8% have canceled projects entirely. Only 8% of owners said they are currently moving forward with new investments.
- Hotel owners also reported that leisure demand continues to soften and they remain understaffed. In light of the survey results, AHLA President and CEO Rosanna Maietta said the association is “focused on advancing policies to spur travel and ease operational pressures.”
Dive Insight:
Hotel owners are feeling financial strain from a weakened labor market and dampened travel demand, according to the survey. Nearly half (49%) of respondents reported being understaffed, while another 30% reported seeing declines in completed leisure stays.
Some 26% of owners, surveyed between Aug. 21 and 29, reported a drop in upcoming leisure bookings compared to the same period last year. Business, group and government travel also showed softness, according to the report.
During the NYU International Hospitality Investment Forum in June, STR President Amanda Hite noted that U.S. hotel booking windows had shortened and bookings for July and August were down year over year amid heightened macroeconomic concerns.
AHLA’s August survey results come after hotel CEOs reported widespread U.S. RevPAR declines during second-quarter earnings. Several chief executives cited economic uncertainty, tariff concerns and diluted travel demand for the quarterly declines.
“It’s been a tough year for hotel operators, especially our small business owners,” Maietta said in a statement, telling Hotel Dive Wednesday that hotel costs continue to outpace revenue.
Congress, though, has the ability to forward policies that would create hotel industry jobs and strengthen local economies, Maietta said. AHLA supports legislation that increases access to capital for small businesses, including the American Franchise Act, she added.
AHLA also supports the H-2B Visa Program, which it says has “increased wages and supported the labor force.” In July, AHLA applauded Congress and President Donald Trump for enacting the “One Big Beautiful Bill Act.”
Meanwhile, the Federal Reserve cut its benchmark interest rate by 25 basis points on Wednesday, which could catalyze hospitality development, according to contractors.
The total U.S. hotel construction pipeline was up 3% year over year in the second quarter of 2025, per Lodging Econometrics.
