The State of the Hotel Industry: Challenges and Opportunities in 2025

What is happening in the hotel sector in 2025?

We publish excerpts from a Benchmark Research Partners study that surveyed hundreds of industry participants—owners, investors, asset managers, brand representatives, management companies, and on-property staff. The goal was to understand not only which problems the hotel business faces today, but also which opportunities inspire its participants to look to the future with optimism. In this article, we share the study’s key findings and examine real examples and cases from conversations with hotel leaders.

Context

Before moving to the results—some context on the hotel market in 2025:
“The industry is at a truly unique inflection point.”
— Zach Demuth, Global Head of Hotels Research at JLL, in an interview with Hospitality Daily

Today, hotel operators are walking a tightrope. On one side, rising operating costs are pressuring profits. On the other, technological innovation and new formats are opening inspiring avenues for growth. Some challenges look familiar: cost pressures and shifting guest expectations have been discussed since pre-pandemic times. But there is good news, too—new business models and advancing technology are creating growth opportunities that simply did not exist before.

Innovation as a Growth Driver

Let’s look at what the research showed.

This is not just about revenue growth, but about how much remains after all hotel operating expenses.

Main takeaway: in 2025, hoteliers are betting on profitability through an improved guest experience.

If we combine the study’s two key findings—the main problem (profitability) and the main source of inspiration (guest-experience innovation)—a clear trend emerges: in 2025, hospitality leaders aim to increase profitability by improving the quality of guest interaction.

Every organization moves under two forces at once—the desire to remove pain and the drive toward opportunity. For hotels, this means solving the profitability problem by focusing on what truly motivates people: creating a superior guest experience.

Innovation in this area triggers a whole chain of positive effects. Happy guests become loyal customers, book directly (bypassing third-party sites), reduce commissions, and increase net profit. Better yet: satisfied guests don’t just return; they recommend the hotel to friends and acquaintances. And word-of-mouth is the most valuable advertising: free and highly trusted.

Case: How a Commercial Leader Lifted Financial Results via Guest Experience

Adele Gutman, who led sales, marketing, and revenue for her hotel group, understood a simple truth: an outstanding guest experience directly increases revenue. She empowered her team—allowing them to do whatever was necessary to ensure guest satisfaction.

As a result, the hotels under Adele’s leadership consistently ranked among the leaders in guest-satisfaction scores—several properties even entered TripAdvisor’s global lists of top hotels.

Here’s how Adele explained her approach:
“If my guests leave happy, I won’t have to rack my brain about occupancy. They’ll be willing to pay more because they’re getting a truly excellent experience.”

By building a culture where employees felt free to exceed expectations, Gutman achieved outstanding results. This led to high customer loyalty, steady demand, and some of the best RevPAR figures in the sector—all without massive spending on advertising and marketing.

Hotel Success in 2025 Depends on People

When respondents were asked which resources would most help their hotels succeed in 2025, the overwhelming majority chose one answer—people. This referred to additional staff, talent acquisition, training, and professional development.
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Interestingly, technology ranked last among success factors. This trend can be read in two ways. On one hand, hotels may need specialists who can leverage technology for tangible results. On the other, the industry may still underestimate the role of technology and how it can radically transform the business.

In 2025, Hoteliers Expect the Highest ROI from People, Sales, and Marketing

The study highlighted two areas participants consider most effective in terms of expected ROI in 2025:

Workforce and talent development,

Marketing and sales.

Technology Will Deliver the Best Returns in the Long Run

Although technology is not perceived as the fastest source of profit in the short term, hotel leaders believe that over the next five years technological solutions will provide the greatest ROI.

Hoteliers Want Broader Use of Artificial Intelligence

The study showed that hotel executives and specialists expect more active adoption of AI technologies in day-to-day processes—from revenue management and pricing to guest-experience personalization and automation of routine tasks.

According to the research, three-quarters of participants expressed a desire for more active AI use in hospitality, with the strongest support coming from owners and investors.

And since owners largely determine where budgets go, we can expect AI technologies to become more deeply integrated into hotel operations in 2025—from demand forecasting and dynamic pricing to automated marketing and guest service.

Case: A Partnership that Creates a Unique Experience and Strengthens Brand Awareness

Kyle and Katina Connaughton, founders of SingleThread—a Michelin three-star restaurant and boutique hotel in Healdsburg, California—are renowned for their distinctive approach to hospitality. One hallmark is the storytelling about artisans, farmers, and producers behind each dish.

To develop this idea, the SingleThread team partnered with Auberge Resorts, OpenTable, Audi, Visa, and others to create ThroughLine—an immersive culinary experience where narrative becomes part of haute cuisine.

How it works: guests watch short films about where ingredients come from and who produces them, forming an emotional connection among guest, chef, and the origin of the dish. This not only elevates the guest experience but also strengthens the SingleThread brand, increasing recognition and emotional appeal.

Case: Website Personalization as a Profit Driver

The guest experience begins long before someone crosses the hotel’s threshold. Ed Scapinak described how Appellation designed its website to deliver highly personalized interaction—and how that became a driver of revenue and profitability.

Instead of showing identical content to every visitor, the site adapts what it displays to each user—considering browsing behavior, booking history, and even culinary preferences.

“If you visit our site, it may look entirely different from what another guest sees—it depends on what we already know about your tastes and past interactions.”

This approach not only makes the digital guest experience more pleasant and relevant, it also boosts engagement and conversion, directly impacting financial results. Appellation’s example clearly shows that personalization is one of the key profitability drivers via improved guest experience.

Case: Creating the Experience Before Arrival — Club Med

Sabrina Cendral, hospitality strategist and former SVP of Marketing & Sales for Club Med North America, understood an important point: the guest experience starts long before check-in.

Her team focused on the period between booking and arrival—working to build anticipation, share useful information, and reinforce the guest’s confidence in their choice.

“There is a critical phase between the moment of booking and the trip,” Sabrina explains. “During this time, you must reassure guests they made the right choice. It’s about creating anticipation and providing all the information to make the stay perfect.”

This proactive communication ensured a smooth transition from booking to arrival, strengthened brand perception, and significantly increased the likelihood of repeat visits.

Case: Growing Revenue Through Upsells and Tech-Enabled Staff

Another way innovations in guest experience increase revenue is by making it easy to offer add-on services (upsells) both before arrival and during the stay.

Appellation built a technology ecosystem that makes this process simple and natural. They united all guest services—rooms, spa, restaurants, events—into a single system available to every staff member.

Now, if a guest chats with a barista about booking a massage, the barista can make the reservation on the spot while preparing coffee. The guest doesn’t need to go to the front desk or wait for a call—everything is handled quickly and conveniently.

This approach not only enhances service levels but also creates new revenue touchpoints, strengthening trust between guest and staff.

Case: Offering Choice to Raise Satisfaction and Profitability

Guest-experience innovation is not only about technology but also about rethinking the entire hotel model. That’s exactly what Roman Pedan, founder and CEO of the fast-growing brand Kasa, did—combining high-tech efficiency with a human approach.

At Kasa, guests can choose their preferred stay format. If a traveler wants independence, they can use digital check-in and fully automated service. If they want a more traditional approach, staff are ready to help—while technology enables this help to be fast, personal, and meaningful.

“We want to create hospitality that is rarely seen but always felt. Automation handles routine tasks, freeing our teams to deliver genuine emotion,” says Roman Pedan.

The beauty of this approach is that everyone wins: guests get the interaction style they want, and the hotel operates more efficiently. The result—happy clients, engaged staff, and rising profitability.

Success in 2025 and Beyond

In 2025, hotel leaders face a tough challenge: they must earn money while constantly finding new ways to delight guests.

Our research shows a clear path to achieving both goals:

Rethink business models and operational processes,

Hire and develop talented people,

Implement technologies that amplify the human factor rather than replace it.

This creates a flywheel of sustainable success: motivated staff → satisfied guests → strong financial results.

Подсказки: hospitality, hotels, AI, guest experience, innovation, technology, ROI, marketing, operations, 2025 trends