U.S. Hotel Costs Are Often Outpacing Revenue Growth

The DJIA fell 444 points on Friday while Nasdaq was down 269, the S&P 500 fell 58 points and the 10-year treasury yield was up .05 to 4.49%. The list of new highs in lodging stocks continued to grow, with HLT, MAR, WH, IHG, CHH and TNL all hitting new high-water marks on Friday.

Hotel properties struggled under rising costs that outpaced revenue growth in 2024, challenging economic growth and job creation. Despite these issues, potential lies ahead, driven by key trends in guest spending, shifting traveler behaviors, and upcoming major sports and entertainment events, according to the America Hotel & Lodging Association's 2025 State of the Industry Report produced in collaboration with Accenture. The report found that property-level costs overall rose faster than revenue and that specific expenses associated with operations and maintenance, sales and marketing, and IT each rose nearly 5% in 2024, further intensifying a challenging hotel operations environment. 

Other top findings from the report include: Hotels supporting employees: hotels are projected to pay employees a record of $128.47 billion in wages, salaries, and other compensation in 2025, up from $125.79 billion in 2024. Hotels are projected to add another 14,000 employees in 2025 and employ more than 2.17 million people. Hotels support communities: hotels are projected to generate a record of $55.46 billion in state and local tax revenue in 2025, up from $53.97 billion in 2024. The 2025 projection includes $26.82 billion in lodging-specific taxes. Hotels are also expected to generate a record of $30.14 billion in federal tax revenue in 2025, up from $29.55 billion in 2024. Nominal hotel guest spending on lodging, transportation, food and beverage, retail and other expenses is expected to reach $777.25 billion in 2025, a 4% increase from 2024. 

Vision Hospitality Group announced the grand re-opening of The Inn at Celebration, Autograph Collection, following a multi-million dollar renovation. Located in Celebration, Florida, the boutique hotel features 115 rooms, a restaurant, event spaces and modern amenities.

Canal House of Georgetown, Tribute Portfolio Hotel is set to open this February in Washington, D.C. Canal House of Georgetown offers 93 guestrooms, 10 specialty suites, 3 terrace rooms and 2 expansive townhouses.

Sandy Shapery, through his entity 12th & A Hotel Partners, will invest approximately $30 million into a hotel's renovation, with financing arranged by Summit Capital. Located in the center of the eight-block oceanfront tourist area in Kailua-Kona, Hawaii, the renovated hotel is anticipated to open its doors under the management of PEG Hospitality Group. The four-story, 123-room Hampton Inn Kailua-Kona Bay will feature a pool, a large outdoor common area complete with a firepit and bar, as well as a pavilion area with local entertainment and cultural activities.

Horseshoe Bay Resort, part of the Crescent Hotels & Resorts Latitudes collection, announced the groundbreaking of the Live Oak Pavilion. Set to open in January 2026, this new $16 million, 10,000+ square foot venue will offer a premier destination for corporate events, social gatherings, weddings and other special occasions in the heart of the Texas Hill Country.

Seven years into the half-billion-dollar renovation of the Hotel Del Coronado, in Coronado, California, the oceanfront resort is about to unveil the most challenging chapter yet, the restoration of its 137-year-old Victorian building, a project that required shutting down every one of the 367 guestrooms for over a year. On February 15, the first 82 guestrooms will open to the public, with three more room releases scheduled through June 15. The project also yielded 37 additional rooms, as larger suites were downsized to make room for more guestrooms. The Hotel Del is part of Hilton's Curio Collection. The hotel already has celebrated multiple milestone moments during the course of its year-long overhaul. That includes a new glass-enclosed sun deck and signature fine dining restaurant, hundreds of refurbished rooms and the addition of 75 high-end residences housing 142 new rooms. A new grand entrance leads up to an expansive veranda. Also restored are the Victorian's historic Crown and Coronet rooms and the ballroom. And come May, Nobu, a high-end Japanese restaurant, will open in the beachfront space formerly occupied by Sheerwater.

Midway has wrapped up a yearlong effort to update a hotel in its CityCentre mixed-use development in Houston, Texas. The hotel, The Moran CityCentre, now features a new front desk, lobby bar and terrace space, an updated ground-level entrance, all 244 guestrooms have been improved and expanded meeting spaces. Additionally, the hotel added a new breakfast restaurant. Formerly the Hotel Sorella City Centre, the hotel was renamed The Moran City Centre in 2019 when HEI Hotels & Resorts took over management from Hotel Valencia Corp.

Rebel Hotel Company announced its acquisition of the management for Ink 48, an upscale property located in the heart of Manhattan. The property will feature exciting new amenities, including a re-imagined rooftop lounge and a revitalized pool deck.

Sanctity Hotels & Durango Cocina & Rooftop is preparing to open in Rancho Cucamonga, California, in mid-February. Part of the Hilton Tapestry Collection, the 68-room hotel will feature amenities including a gym, sauna, Thriv Spa, and a dining concept from Boulevard Hospitality Group.

Red Roof announced the opening of the Red Roof Inn Del Rio, Texas. Owner Del Hospitality, LLC invested $2 million in renovations to the property, including completely renovating guest bathrooms, refreshing the lobby, updated the vending area and adding new vending machines, refinishing the pool deck and pool surface, painting the exterior of the hotel, and adding new landscaping.

The M, in Utica, New York, is now renting one- and two-bedroom units. The Lahinch Group announced the purchase of the former Mayro building three years ago.

A new auction is scheduled for the historic Hotel Bossert, owned by The Chetrit Group. The debt on the Brooklyn Heights hotel has ballooned to $177 million, according to the notice of sale, which was first reported by PincusCo.

In 2025, the Presidente InterContinental Monterrey will open in Monterrey, Mexico. It will feature 293 guestrooms, meeting and conference facilities, a gym and multiple food and beverage venues.

Personnel Moves

Hilton Grand Vacations Inc. announced Daniel J. Mathewes, the company's President and Chief Financial Officer, is taking a temporary leave of absence for personal reasons. Erin Day, who has held the position of Executive Vice President of Finance since April 2024, will assume the role of acting CFO immediately.

RIU Hotels & Resorts is progressing with its generational transition as members of the fourth generation of the Riu family assume expanded leadership roles within the company, following the retirement of Carmen Riu in July 2024. CEO Luis Riu, now the sole leader of the company, has officially delegated new responsibilities to his successors after approvals from RIU Group's Board of Directors and the Family Board. The company has confirmed the following executive appointments: Roberto Riu Rodriguez, Naomi Riu Rodriguez, Luis Riu Rodriguez, Lola Trian Riu, and Joan Trian Riu.

Europe Highlights

Leumi UK has completed a £70 million refinancing loan with owner Zetland Capital for it to refinance the 160-room Edinburgh Marriott Holyrood and the 338-room Manchester Marriott Hotel Piccadilly.

Maybourne announced its newest development, The Maybourne Saint-Germain, to open in Paris by 2027. The company aims to bring a palace-style hotel and 23 ultra-luxury branded residences to the Parisian quarter of Saint-Germain-des-Pres. The development will offer six food and beverage outlets along with access to Maybourne's new wellness and longevity brand, Surrenne.