The emergence of Gen Z travelers and the return of group travel strength will be among the defining trends that shape hospitality in 2025.
And while the industry may no longer see the dramatic RevPAR gains that characterized recent years, hotel rates are expected to maintain their strength into the new year, with industry insiders reporting little pressure to cut pricing and hotel companies reporting sustained demand across the leisure, business and group segments.
"I think rates are largely going to stay on par," said Jon Makhmaltchi, founder of J.Mak Hospitality. "We're not seeing our partners cutting rates, and they've done really well in their third quarter."
While leisure travel remains steady and corporate business continues to recover, it's group demand that has emerged as a particularly powerful driver of hotel performance this year. That trend is likely to continue. From corporate buyouts to social gatherings, group business is still showing remarkable strength heading into 2025, according to Makhmaltchi.
Jon Makhmaltchi, J.Mak Hospitality
"Group demand is still happening all over the map," he said. "And these aren't necessarily small groups. Let's say the group needs 50 rooms and the hotel has 90 rooms -- they don't mind. They'll buy out the whole hotel."
Hotels will also need to brace for intensified global competition in 2025, as properties worldwide aggressively compete to court the U.S. traveler.
"The dollar is expected to be stronger, so that means that all of these places, whether it be Asia or Europe, will really be relying on American travelers," Makhmaltchi said, describing a "high-pressure" competitive landscape for hoteliers.
The influence of Gen Z
With Gen Z emerging as an increasingly influential market force, many hotels will be reimagining core aspects of their operations in 2025. That's especially true for food and beverage, whether that means expanding nonalcoholic beverage programs or introducing more nontraditional dining concepts.
Candace MacDonald, Carbonate
"Gen Z is a much more diverse generation than previous generations, which means they have different palates," said Candace MacDonald, co-founder and managing director of Carbonate, a hospitality-focused creative agency. "It's not just that kind of New American restaurant or steakhouse that's surefire.
"And we're also seeing that people are eating differently -- we're not necessarily in a three-meals-a-day kind of dining environment anymore."
According to MacDonald, these shifts in consumer preference mean that hotels are more willing to take a risk with their signature restaurants.
In the next year, that might translate to opting to showcase more globally inspired flavors or tapping into less formal concepts, like swapping out a traditional breakfast venue in favor of a cart serving coffee and pastries in the lobby.
And with Gen Z guests increasingly embracing "sober-curious" lifestyles or foregoing alcohol altogether, hotels in 2025 will continue to expand their beverage menus with sophisticated nonalcoholic options and exploring hotel bar alternatives. MacDonald cited Asian-inspired late-night dessert cafes, for instance, as an on-trend food and beverage concept for guests looking to socialize sans alcohol.