NEW YORK—Faced with rising costs, tariffs, labor issues, insurance, deferred maintenance, and accelerating technology, hotel leaders must find ways to tackle this “challenging time of great uncertainty,” according to Rosanna Maietta, president and CEO, American Hotel & Lodging Association.
Speaking at the NYU International Hospitality Investment Forum on a panel about the value of collaboration, Maietta described a complex outlook for hospitality. “There was great optimism in January that this administration would come in with a typical Republican agenda of low tax and low barriers for business,” she said. “I don’t think anyone anticipated the uncertainty that would be caused by tariffs, or the ripple effect on inbound travel.”
However, she said that President Trump’s “big, beautiful bill” would be a first step forward in making progress and highlighted positive aspects for the industry in recent legislation, including small business deductions and “no tax on tips.”
She said that the AHLA continues to advocate for the industry, “talking to the White House, talking to members of Congress, so that they understand that travel is an export.” She added: “Labor is our biggest challenge, amid workforce mandates and rising wages, making it harder to run a business and have good margins.”
Signs of Improvement
Joseph Bojanowski, president, PM Hotel Group, noted that amid “all the noise and uncertainty” there was some statistical evidence that things were improving. “The data just came out for the first three weeks of May, and while the top 25 percent of markets are relatively flat, RevPAR is up in the others,” he said. “It’s important to focus on what is trending in the data and not what is trending on social media.”
Craig Smith, CEO, Aimbridge Hospitality, agreed that it was important to focus on the numbers but said that the industry was experiencing a moment when it was “harder to forecast the future." He added: “It feels like we’re waiting for the tide to go out. Overall, it’s a muted time. What can we do to prepare for the storm? I think there are great opportunities to lean in, and we are doing that.”
He said that positive data had come out about group travel, even if leisure and luxury were trading down, describing it as a “Whac-A-Mole” challenge.
Added Nelson Knight, president real estate and investments, Apple Hospitality REIT: “We own 220 hotels in 37 states, and have 16 different management companies that work for us.” While he acknowledged that “not every market is the same”, he said that on balance the group was seeing occupancy rates in “the high seventies, eighties” and suggested that “good groups always rise to the top.”
Pain Points
Ben Perelmuter, CEO, Remington Hospitality, advocated for a “back to basics approach, controlling what you can control.” He added: “On the cost side, we have several iterations of mitigation plans, war room levels one, two and three, that you can roll up your sleeves and execute.”
He shared admiration for the rental cars business’ ability to add items onto receipts and suggested that the hospitality industry could learn from that.
Tackling one of the industry’s biggest pain points – the labor outlook – Maietta said: “The industry was down 600,000 jobs coming out of Covid. We’re now only 200,000 short, but with regional disparities.” She said however that the industry needed to “shout” about its employment achievements and the “high level of competitiveness” on offer.
“There is a misconception that we don’t have well paid jobs, but that is not true, we pay well and above minimum wage,” she said. “Our benefits include flexibility to employees, transportation credits, and the upward mobility that the industry still provides – the American dream is alive and well.”