WASHINGTON – Hotel properties struggled under rising costs that outpaced revenue growth in 2024, challenging economic growth and job creation. Despite these issues, potential lies ahead, driven by key trends in guest spending, shifting traveler behaviors, and upcoming major sports and entertainment events, according to the American Hotel & Lodging Association’s (AHLA) 2025 State of the Industry report produced in collaboration with AHLA Silver Partner Accenture.
The report found that property-level costs overall rose faster than revenue and that specific expenses associated with operations and maintenance, sales and marketing, and IT each rose nearly 5% in 2024, further intensifying a challenging hotel operations environment.
America’s small business hotel owners have been struggling as rising costs, compounded by high inflation and interest rates, make it difficult to stay open and serve guests, said AHLA President & CEO Rosanna Maietta. That’s why we will be focused on promoting policies that help our members overcome these challenges so they can focus on what they do best – creating pathways for their employees to find lasting careers and creating unforgettable experiences for their guests.
Hoteliers will welcome the opportunity to tap into consumers’ growing demand for travel and evolving opportunities to harness live sports and entertainment as an additional revenue generator. There is a balance to strike in delivering on customer expectations, and keeping a careful watch on the bottom line. Leveraging data and embedding technologies such as artificial intelligence can boost personalization of experiences across rising new customer segments, along with agility and cost-effectiveness. Done well, this can lead to increased loyalty, strengthened relationships and new growth opportunities, said Liselotte De Maar, managing director, global strategy lead for travel at Accenture.
Other top findings from the 2025 State of the Industry report include:
Hotels supporting employees: Hotels are projected to pay employees a record of $128.47 billion in wages, salaries, and other compensation in 2025, up from $125.79 billion in 2024.
Hotels are projected to add another 14,000 employees in 2025 and employ more than 2.17 million people. However, this is still about 200,000 short of the 2.37 million people employed in 2019, before the pandemic.
Hotels support communities: Hotels are projected to generate a record of $55.46 billion in state and local tax revenue in 2025, up from $53.97 billion in 2024.
The 2025 projection includes $26.82 billion in lodging-specific taxes.
Hotels are also expected to generate a record of $30.14 billion in federal tax revenue in 2025, up from $29.55 billion in 2024.
Nominal hotel guest spending on lodging, transportation, food and beverage, retail, and other expenses is expected to reach $777.25 billion in 2025, a 4% increase from the record high $747.17 billion spent in 2024.
The report explained in detail how hotels can take advantage of several opportunities to maximize revenue, including major sports and entertainment events such as the 2026 World Cup, which will be hosted by several U.S. cities. It also highlighted other emerging travel trends that could provide opportunities to drive revenue and growth, including:
Shifting demographics offer a chance to create value across generations, as well as expanding specific offerings to growing segments like aging and solo travelers
Successful strategies by hoteliers to create new sources of revenue, such as camping accommodation, stays that are focused on entertainment or new partnerships through loyalty programs
Meeting the travel and accommodation requirements to support the growing number of events and experiences for attendees as well as staff, as cities across the U.S. are evolving into vibrant hubs of sports and entertainment tourism
Using technology and AI to create a more personal travel experience as people book trips and plan itineraries
Download the 2025 State of the Industry report here. To schedule an interview with either AHLA Senior Vice President of Federal Affairs, Policy & Research or managing director, global strategy lead for travel at Accenture, Liselotte De Maar, to discuss the report, email [email protected].
