Hospitality sector needs to beef up resilience

On Tuesday 8 September, Horwath held its annual HTL day, with resilience as the main subject. Given all the setbacks the Dutch hotel sector has had to endure, that may come as no surprise. The real issue, of course, is how to become resilient.

The macro numbers for the Dutch hotel sector were nothing to write home about. Occupancy-wise, the provinces did not manage to show an increase, while Amsterdam did. ADR (average daily rate) development showed a different picture: in the Netherlands, ADR went down by 2.5% to EUR 155 (2025 compared with 2024). In the Amsterdam region, including Airport Schiphol, the drop was even −3.7%. Only provincial hotels managed to keep ADR flat year on year.

Expenses, however, did not stay flat at all, thus compressing margins. Operating expenses went from 64% to 68%. Responsible for the rise were personnel (+3 percentage points) and general expenses (+1 percentage point). The rebound in operational margins seen after the Covid lockdowns was thus short-lived. Another remarkable point is that in the rebound, operational margins between the Amsterdam region and the provinces were diverging, but now have completely converged to about the same level.

A specifically Dutch item, is the higher VAT on hotel nights, which was increased from 6% to 21% from the beginning of this year. As the figures above show, hotels in general have not been able to fully pass on the expense increases in 2025. With the higher VAT, 2026 promises to be exceptionally hard for the sector. According to ABN-Amro, the VAT increase led to 780,000 fewer business stays (nights) in H1. This is especially painful, as business visitors have the highest local total spend.

Together with other measures at the local level (for example, the tourist tax in Amsterdam is the highest in the world now), the sector faced a very difficult year. As one of the panelists, a private-equity investor, confirmed, investments in the Dutch hotel sector are on hold for now. And the reason for that was not just the tax increases and rising expenses in general, but also regulatory uncertainty; the sector needs a stable and predictable government, which is now lacking.

And this is exactly where the danger lurks, as Stef Driessen of ABN-Amro explained: the measure most often mentioned by hoteliers to preserve cash flows was cutting back on investment and renovations. A whopping 43.6% of hoteliers intend to scale back investing in their own business. While this may help cashflows in the short term, it endangers them in the long term.

This penny-wise, pound-foolish strategy is clearly not the path to resilience. So what is? According to both Horwath and ABN-Amro, hoteliers need to think differently. While in the old days the focus was mostly on ADR and occupancy, revenue per m² or per hour could be better metrics. A breakfast room does not generate anything after breakfast is over, whereas that space could be used for another activity. This means that hoteliers also must start looking for new types of guests and show them the possibilities they can offer. Also, hoteliers need to see changing customer preferences: Gen Z apparently prefers to be out and about during the day and less at night, making lunchrooms and the like incredibly popular. Hotels can tap into these opportunities if they are willing to see them and make the necessary changes and investments.

But more traditional measures should not be forgotten either, like benchmarking. According to ABN-Amro, cleaning a room should take no longer than 20 minutes, but at some hotels this takes 40 minutes. Benchmarking, at all levels, needs to be done in order to discover operational inefficiencies.

As an aside, here is also where the presenter and later panellists commented that the sector needs to share more information with one another, so that as a collective they can become better equipped to improve matters.

Also, customer segmentation should play a crucial part, as not all customers are equal. Looking at longer stays (cheaper room-cleaning costs), on-site spending, good reviews and high repeat-visit probabilities should be front and center the marketing department. Hence Stef Driessen’s surprise that the survey showed 8.5% of hoteliers are considering cutting back on marketing to preserve cash flows.

As presented, resilience means that hoteliers need to team up and share information and best practices; analyse shifting customer demand; find creative ways to increase revenue per m²/hour; control expenses; keep investing instead of retreating; choose the right customer segments to cater to; and show how beneficial the hotel sector is for the Netherlands and local communities. That points to proactivity, data gathering and management, creativity, transparency, communication, and community being critical elements in becoming resilient.