The Hospitality Asset Managers Association (HAMA) Spring 2025 Industry Outlook Survey revealed that its members have an outlook of cautious optimism, tempered by a growing concern about macroeconomic instability.
The survey reflects the sentiments of 80 hospitality asset managers, approximately one-third of the association’s membership.
“Hospitality asset managers continue to have an overall positive view of the industry,” said Chad F. Sorenson, president, HAMA and CEO, CHMWarnick. “The majority of our members are actively pursuing acquisitions, and most of their hotels have returned to or exceeded previous group and business transient room nights, both positive signs of an active industry from both the corporate and guest perspectives.”
According to the survey, the top three issues concerning asset managers are declining demand, escalating tariffs and a tie between DOGE (Department of Government Expenditures) cuts and wage increases.
“Going into 2025, the general consensus was that demand was slowing, and RevPAR growth would be driven primarily by moderate ADR growth, not occupancy,” he said. “This is particularly troubling in the current environment in which inflation remains sticky.”
Sorenson added that tariffs and DOGE-related uncertainty are particularly problematic, noting, “It’s very difficult to project the cost impacts related to tariffs, and it is forcing many investors to take a wait-and-see approach, regardless of having available capital and desire to do deals.”
On the wage front, Sorenson noted a mixed outlook. “The good news, or best bad news, is related to wage increases,” he said. “The second half of 2024 finally allowed the industry to get a better handle on labor costs, but the upward pressure continues.”
Interestingly, the survey, conducted shortly after market disruptions tied to new federal policies, initially showed a surprisingly optimistic tone. But Sorenson explained that sentiment may already be shifting.
“This survey was taken just after the market commotion around tariffs and other noise created by the new administration in DC,” he said. “Subsequently, a sizable cross-section of HAMA members was informally polled again, and the general consensus was that optimism has waned and there are heightened concerns around the impact of several macro-level economic factors.”
This evolution in sentiment may also explain the split views on recession risks. Nearly half (49%) of survey respondents believe the U.S. will enter a recession in 2025—a sharp increase from just 19% in HAMA’s Fall 2024 report.
“As I mentioned previously, most members felt good about their 2025 strategy, but that doesn’t mean that they liked the market and operating environment,” Sorenson said. “There continues to be signs of potential recession, yet some operating metrics are positive. For example, RevPAR continues to be driven by rate, even though occupancy is projected to be flat for the full year.”
While some might be alarmed by the shifting economic sentiment, Sorenson wasn’t surprised by the survey’s results.
“Heading into 2025, I felt that the industry had their collective heads around the 2025 operating and transaction environment,” he said. “That doesn’t mean we were excited about it, but there was a relatively clear line of sight.”
The HAMA leader explained that while revenue growth was expected to remain slow and the transaction market still faces significant challenges, asset managers had prepared accordingly, developing plans that many have since adjusted in response to recent macroeconomic changes.
As the industry navigates these uncertain times, the role of asset managers has never been more critical, according to Sorenson, noting that there are persistent misconceptions about what asset managers do.
“There is an industry myth that professional asset management is needed more in challenging times than when times are good,” he explained. “That simply isn’t true. Most sophisticated hotel investors recognize the need for permanent asset management.”
He added that in today’s market, the focus of asset managers has shifted.
“In market conditions that we face today, asset managers are focused on revenue growth generation as much, if not more, than cost containment,” he said. “Enhancing existing revenue streams and identifying new ones is a regular part of a great asset manager’s playbook.”
