- Developers still generally bullish on hotel branded
condo market – For a growing number of mixed-use
condominium development projects, partnering with a luxury brand is
an effective way to appeal to residents seeking premium amenities,
top-tier service, and an overall lifestyle reminiscent of a luxury
resort hotel. We expect this trend to continue in key markets
across the United States as developers look to pre-sell condos and
tap into buyers' deposits to help offset hotel construction and
other costs while adding additional value to existing real
estate.
- Experiential and wellness travel gains popularity
– From surfing in Costa Rica to hiking in upstate
New York, many travelers are seeking authentic, culturally rich
experiences that support their personal wellbeing. Wellness travel
has been gaining popularity in recent years and is expected to
further grow in 2025, generally boosting destinations that offer
things like spas, yoga, meditation, nature immersion, and
nutrition-based food options.
- A renewed focus on stabilizing costs –
Persistent inflation, high debt costs, and regulatory challenges
have had a significant impact on new hotel developments and the
maintenance of existing properties throughout the industry. We
expect these headwinds to remain in place over the next year,
leading to a renewed focus on cost management, repositioning of
existing assets, and profitable markets.
- Convention hotel sector likely to maintain growth
– The convention travel sector continued its
recovery last year from its pandemic lows, indicating that demand
for in-person events is somewhat immune to sustained challenges in
the U.S. office sector driven by hybrid and remote work. Many
cities with large convention centers are seeing substantial private
sector development of new convention hotels and investment in
upgrading and expanding existing hotel offerings to accommodate
renewed demand for group business travel.
- A projected pickup in U.S. outbound hotel investment – Recent nine-figure hotel deals in Asia and Europe suggest that U.S. investors are looking to deploy more capital abroad. U.S. outbound foreign investment in hospitality properties is expected to increase in 2025 as investors strategically target markets with strong fundamentals, substantial forecasted growth potential, and value-add opportunities.
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