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. 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 percent of respondents delaying projects, 24 percent scaling back, and 8 percent canceling entirely. Only 8 percent of property owners and operators reported moving forward with new investments. Nearly half of the respondents (49 percent) 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 percent of hotels seeing declines in completed leisure stays and 26 percent reporting drops in upcoming bookings compared to the same period last year. Business, group, and government travel also showed softness, with 15 to 17 percent 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,” AHLA President and CEO Rosanna Maietta said in a statement. “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 Aug. 21 and 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, according to AHLA.