The Big Story
The U.S. hotel industry faces mounting financial pressures as
operating costs continue to rise faster than
revenue growth. According to CBRE1 and the American
Hotel & Lodging Association (AHLA)2, insurance
premiums have surged by over 15%, with economy and midscale
properties seeing even sharper increases. Simultaneously,
utilities, property maintenance, and labor expenses have escalated,
forcing hoteliers to reconsider pricing strategies and implement
tighter cost controls to protect margins in a persistently
inflationary environment.
These pressures are compounded by ongoing labor shortages and
high wage demands, which strain operations across many hotel
segments. Reports suggest that while demand fundamentals are
stabilizing, particularly in urban markets, the cost side of the
equation remains volatile. Due to construction and financing
challenges, margin erosion remains a concern, especially for
independent operators and
distressed assets.
From a capital markets perspective, investor sentiment around
hospitality real estate is mixed. LightBox3 notes that
high interest rates and valuation gaps are slowing deal activity,
with some transactions stalling due to mismatched buyer and seller
expectations. However, some optimism persists as inflation cools,
and RevPAR (revenue per available room) shows signs of growth.
Hotel owners and brands increasingly turn to expert advisory
services for margin improvement, asset management, and transaction
execution to navigate
this complex environment.
Looking ahead, the hotel sector will need to prioritize operational efficiency and financial agility. To remain competitive, technology adoption, dynamic labor models, and cost-planning tools will be essential. The hotel business is undergoing a structural adjustment, as illustrated by ongoing closures, distressed sales, and cautious investment trends4. Resilience will depend on how healthy operators can realign cost structures, manage assets strategically, and adapt to a still-shifting macroeconomic landscape.
The Ankura Advantage
HOTEL EXPERTISE
From multi-billion-dollar franchises to startups seeking seed-capital, we understand and solve for the issues hotels are facing at all stages of the business lifecycle. We partner with our clients to unlock value by automating processes, optimizing technology solutions and bringing visibility into hospitality specific financial metrics fast.
ACCOMPLISHED TEAM
We deliver experienced talent to the table – leaders that have sat in the chairs and experienced issues first-hand in the industry. These operational leaders dig in and get their hands dirty to resolve pressing issues, uncover and fix inefficiencies and bring strategic initiatives to the finish line.
RESILIENT AND LASTING SOLUTIONS
We don't just plug holes...but we don't try to boil the ocean either. Our mandate is to deliver rapid, sustainable, and repeatable improvements to support long-term growth.
PEOPLE FIRST
To succeed, the team needs to be deeply involved in the process. Change management, training, and coaching aren't workstreams; it's our philosophy and the key to sustained improvement.
How We Support Travel & Leisure Clients
Finance Resiliency & Performance Improvement
Increase efficiency and effectiveness of Finance; improve business partnering; drive initiatives across people, process, and technology; automate key processes; decrease cost of finance
Liquidity Management
Improve working capital and liquidity with dynamic financial models and scenario analyses; dive deep into the cash conversion cycle to minimize impacts of seasonality
FP&A
Provide transparency and visibility; deliver insights into performance and leverage advanced analytics to drive decision-making, particularly as hotel/leisure navigates customer price sensitivity in a high inflationary environment. Creation of dashboards to monitor trends and KPIs related to strategy execution.
Transaction & Valuation Support
Structured integration and subject-matter expertise to drive process amidst continued industry consolidation
Margin Optimization
Align pricing with expenses using cost-planning tools; optimize asset and labor management to reduce costs; enhance gross margin through strategic cost-saving initiatives
Footnotes
1. CBRE: All Eyes on Operating Costs in 2025
2. AHLA 2025 State of the Industry Report
3. LightBox: Hospitality Real Estate in 2025
4. NetSuite: 13 Common Challenges in the Hospitality Industry in 2025
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