As the final leg of 2024 approaches, one question is on many hospitality professionals' minds: Where is the industry headed next year?
During the Lodging Conference this week in Phoenix, hospitality industry leaders — including the chairman of the Asian American Hotel Owners Association and CEOs at Extended Stay America, Peachtree Group and JLL Hotels & Hospitality Group — spoke about the progress the industry has made in 2024 and shared their outlooks on the regulatory environment and investment activity for 2025.
Below are some of the top takeaways from these leaders’ discussion, which took place during a Wednesday morning panel at the conference.
We’re battling so many [regulatory] issues day by day, where things are changing so quickly. It almost feels like it's getting harder and harder to operate these hotels.
Miraj Patel
2024-2025 chairman of AAHOA
More on the regulatory environment: Patel was among several conference panelists to raise concerns about current regulatory hurdles hoteliers are facing. He specifically pointed out the Safe Hotels Act, which was simultaneously being heard by the New York City Council as the Phoenix panel was underway Wednesday.
Last week, Patel condemned the proposed legislation that would require hotel owners in the city to obtain a license in order to operate there, along with other mandates.
In a statement obtained by Hotel Dive, he claimed the bill “ignores legitimate concerns of our minority-owned small businesses members” and poses “operational burdens.” Leaders from the American Hotel and Lodging Association have also condemned the bill, while local unions and other groups are pushing for its passage.
Kevin Davis, Americas CEO for JLL Hotels & Hospitality Group, said during the panel that the proposed bill could have a negative impact on non-union hotel owners.
“As a general matter, it's important that we stay engaged with our local, state and federal legislators, because I think these efforts on the part of certain industry groups will only get stronger,” Davis added.
Hotel laws and regulations are impacting the transaction market as well, Greg Friedman, CEO of Peachtree Group noted. In markets like New York City where new legislation is being considered — and contested — “it's not a friendly [investment] environment to be in,” Friedman said. “You're dealing with too many challenges and too many headwinds.”
However, the industry can expect to see markets where regulatory challenges aren’t present thrive over the next several years, Friedman noted. And deal activity more generally is going to pick up soon, Davis forecasted.
It's like a boulder at the top of a hill. It kind of starts small and slowly, but as it starts to go down the hill, it gets bigger and it goes faster. I think that describes what the transaction market will be like next year.
Kevin Davis
Americas CEO, JLL Hotels & Hospitality Group
More on hotel investment: According to Davis, hotel deal activity will likely pick up in mid-November and into December with it further ramping up in the next six to eight months. Upcoming anticipated interest rate cuts will be a catalyst for transactions, he noted.
Other leaders also expressed optimism about investment activity in 2025, with Greg Juceam, president and CEO of Extended Stay America, saying there is a “cocktail of levers that are about to get pulled” that will have an impact on hotel investment, including lowering interest rates.
Other factors include having election clarity soon, a “huge amount” of refinancing expected to take place and an increase in property improvement plans getting underway after being deferred for the last several years, Juceam noted.
“You put all of those things together, and I think it's going to be incredibly active, maybe I’d even say [an] explosive, time for the industry,” said Juceam, one of several panelists with an optimistic view on where the industry is headed.
Get your contractors and your project managers lined up now. Buckle up. It’s going to be an amazing ride [in] 2026 and 2027, no matter where you sit in this industry.
Greg Juceam
president and CEO, Extended Stay America
More on the future of hospitality: Davis echoed similar upbeat sentiments, saying the future of the hospitality industry is “incredibly bright.”
Larry Cuculic, president and CEO at BWH Hotels, meanwhile, said his outlook on the industry has gone from “patient optimism” in 2024 to just plain optimism for 2025.
Friedman highlighted the industry’s resilience, saying it will “have to continue to adapt to new trends and new consumer expectations” in 2025. And Lisa Lombardo, president of ARK, noted that “collaboration is going to be key as we move forward into the next year.”
