Budget season in hospitality can feel like trying to land a plane in fog—numbers are everywhere, and every decision impacts your property’s future. That’s where the Budgeting Playbook comes in as a clear, actionable guide to help you build a strategy-driven budget that aligns market realities with operational goals.
In the ever-evolving landscape of global trade, tariffs have emerged as a formidable challenge for hoteliers. As these financial barriers reshape the market, understanding their implications is crucial for those in the hospitality industry. Hotel giants have already noted the possible shifts in revenue due to trade policies.
Summer is just at the half-way point, but financial reporting for many borrowers for second quarter is still around the corner. Given market volatility, tariffs and other financial burdens – initial indicators suggest that companies are likely straining if not flailing under the weight of economic conditions. What this means for borrowers and lenders is that second quarter reporting could be underwhelming, if not disastrous – putting multiple borrowers in default under their loans.
In 2025, the national lodging market has continued to demonstrate resilient performance, maintaining strong average daily rate (ADR) and revenue per available room (RevPAR) metrics despite flat occupancy growth. Compared to 2023 and 2024, ADR and RevPAR have remained near record levels, driven by solid group and business travel in primary markets, even as some leisure markets began to stabilize or soften. National occupancy remained unchanged from 2023, but overall hotel revenues have continued to grow modestly year over year. These trends suggest a market that has largely stabilized following the disruptions of the pandemic era. Nevertheless, the high cost of debt and capital, coupled with elevated construction costs, continues to weigh heavily on new hotel development activity. As a result, while the underlying performance environment remains favorable for development in theory, actual construction has been subdued, with the supply growth forecast for 2025 falling well below pre-pandemic averages.
At first glance, the hotel industry in the United States seems to be climbing back. Total revenue per available room (TRevPAR), gross operating profit per available room (GOPPAR), and payroll per available room (PayPAR) have all posted year-over-year gains. But peel back the layers, adjust for inflation, and a different picture emerges—one where progress is slower, margins thinner, and true recovery still out of reach.
The hospitality industry has faced numerous challenges over the past few years, from the impacts of the COVID-19 pandemic to rising interest rates and, most recently, the consequences of immigration policies and tariffs. Despite these headwinds, recent data indicate a promising upward trend in Small Business Administration (SBA) loans for hotels in 2025. This increase reflects renewed investor confidence, resilience in the limited-service hotel market, and the ultimate need to transact.One of the major drivers in the increase in SBA loans is the resilient economy. The economy, despite tariff concerns, continues to grow, and the Consumer Price Index (CPI) is waning, aided by falling gasoline prices in particular. Many expect the U.S. economy to see a balanced expansion in 2025. This modest growth is anticipated to be driven by consumer spending, productivity gains, and easing financial conditions, as the latest low CPI figures may support an interest rate adjustment soon. A large part of the consumer spending is expected to stem from domestic travel.This resilient economy is bolstering the tourism industry well, as consumers continue to focus on traveling. A strong summer vacation season should foster a new wave of positive momentum among investors and consumers. This trend began with the early Memorial Day holiday weekend, which illustrated the third-highest travel numbers in recorded history, per STR. The current landscape is beneficial for hoteliers and SBA lenders alike.With stabilizing interest rates, many SBA lenders are re-entering the hotel lending space and are ramping up activity. Regional banks continue to be reliable providers of first-mortgage debt in local markets where their understanding of unique conditions gives them a competitive edge. The surge in SBA-backed financing signifies a robust rebuilding phase for hotels across the nation. It enables hotel owners to enhance their facilities, adopt innovative amenities, and manage cash flow effectively. Furthermore, increased access to capital supports new hotel startups and the expansion of existing properties, boosting employment and local economies.As 2025 progresses, the trend of rising SBA loan volumes for hotels is expected to continue, driven by ongoing industry recovery, consumer demand, and supportive lending policies. With increased access to funds, hotel businesses are better positioned to innovate, expand, and serve travelers. Stakeholders should stay informed about evolving financing options to leverage opportunities for growth and resilience in the competitive hospitality marketplace.
The start of June always brings the industry together in New York City, and we HVS attendees enjoyed our time at the NYU International Hospitality Investment Forum this year. It was great to see many of you there and share our recent experiences in the industry. This article summarizes our main takeaways from the event.
The Boutique Hotel Investment Conference, the premier gathering dedicated to independent boutique hotel investment, returns to New York City on June 4, 2025, at the Florence Gould Hall. It promises a dynamic day filled with high-impact conversations, strategic insights, and unmatched networking for boutique and luxury hospitality owners, developers, investors, and visionaries.
Hotels are complex assets that blend real estate with business value. For property tax purposes, only the real estate is taxable – yet all too often, assessors inadvertently include the hotel’s intangible business assets in the assessed value.
If there’s one word that defines the current U.S. hotel landscape, it’s uncertainty. As we move into 2025, hoteliers across the country are facing a slew of critical questions: How resilient is demand? Are rising costs here to stay? And most importantly—how can we maintain profitability in a market that feels, well, unpredictable?
The two key differentiating factors between economy and midscale extended-stay hotels are the quality of the finishes and the price point. Economy extended-stay hotels typically offer a more budget-friendly option for guests, focusing on basic, functional accommodations with limited extra features.
The hospitality industry in Georgia and the Southeast is at a crossroads. As the region prepares for major events—including Atlanta’s MLB All-Star Game (2025) and FIFA World Cup (2026)—hotels are gearing up for increased demand. However, operators face a major challenge: rising labor costs, stagnant employment recovery, and declining Net Operating Income (NOI).
It was wonderful to see everyone at ALIS in Los Angeles. The conference went off without a hitch, meeting rooms were full, and although the outlook for fundamental performance remained muted, investor sentiment was strong, echoing what we saw in our recently released second annual U.S. Hotels Investor Intentions survey.
The hotel investment industry gathered in L.A. once again for the ALIS Conference last week. It was a fantastic opportunity to reconnect with colleagues, compare notes, and share predictions of what the future may bring.
As we all continue to find our footing in today’s market, we remain encouraged by the level of interest we have seen from offshore capital looking to invest in U.S. hotel assets, with the driving factors being their search for yield, stability, and growth.
Major cities in the Southeast like Charleston, Atlanta, Savannah, and Raleigh-Durham remain strong hotel investment markets due to their thriving tourism, growing business hubs, and strategic locations. Enhanced financing options are expected to boost transaction volumes. Significant construction pipelines and improving economic conditions highlight the region's long-term resilience and investment appeal.
The Fed recently gave us a surprise similar to the one my grandfather used to give my father. My father recently recounted to my son how his grandfather would give him a quarter and a Dr. Pepper each time he saw him. Occasionally, he would surprise him with a half dollar instead, and my father would be thrilled.
In just one year, CBRE's Global Hotel Asset Management practice has grown to oversee 40+ properties with 8,500+ rooms worldwide. Our success stems from leveraging CBRE's vast resources and our team's global expertise to deliver unmatched results.
Sonesta, the 8th largest hotel company in the US, today announced a new incentive program that provides a 2% incentive to franchisees who utilize Sonesta’s procurement program for purchasing needs. This initiative offers significant financial benefits to owners and underscores Sonesta's commitment to transparency, innovation, and strong franchise relationships.
Each year, HVS researches and compiles development costs from our database of actual hotel construction budgets. This source provides the basis for our illustrated total development costs per room and per product type.