A variety of challenges continue to face hoteliers in 2025. Hotel Business spoke with Peter D. Beukema, CEO, 6PM Hospitality Partners; Tommy Holmes, CEO, Ivy Hospitality; and Will Loughran, COO, Concord Hospitality, to gather their thoughts on those challenges, how the year has gone so far and where they think things are heading.
—Gregg Wallis
How have the first few months of 2025 been for your company and the industry?
Beukema: The start of 2025 has been a bit of a roller coaster. While we have some markets achieving record-breaking performance, others have experienced a slower-than-expected start—and some have seen fluctuations that make forecasting a challenge. Overall, the first quarter has been softer than we would like, but all our forecast models point to improvement as the year progresses.
Despite economic uncertainties, we remain optimistic that Americans are eager to travel this summer. Given the recent headlines and financial considerations, we anticipate an increase in regional travel, with families opting for road trips and shorter, more accessible vacations. As a result, we have adjusted our marketing focus to target travelers within a one- to two-tank driving radius, ensuring that we capture demand from those looking for convenient, high-quality experiences closer to home.
Holmes: Ivy Hospitality’s management arm has been on a consistent growth trajectory. We managed to transition two hotels into our system at the 11th hour in 2024, with both properties going live on Jan. 1.
We have managed to maintain the momentum we had following our launch in August of last year, where we transitioned 29 hotels into our system and closed on our most recent property on March 19.
In terms of business demand, we experienced a slower start to the year than we expected, though it was consistent with other markets. Managing labor expenses and operating costs to balance profitability margins was challenging in January. February saw an improvement compared to but did not pace for prior year. Our industry is dealing with uncertainty due to global changes impacting us more than we expected, giving everyone a slower-than-expected start to the year.
Loughran: We are off to a strong start in 2025, forecasting the first quarter to come in 20% over the prior year in revenue. We have managed our operations very efficiently, delivering excellent flow. We are on target with new additions to our portfolio, including The Wyndham Grand in Jupiter, FL; The Atlanta Marriott Northwest and Courtyard Buckhead in Georgia; and the Sheraton Imperial in the Raleigh Triangle Park area. Concord comp-hotels have seen strong RevPAR growth trends to start 2025, up 6.5% February year-to-date, which exceeds our competitive sets by 1% and outpaces the U.S. industry, which has shown a 3% RevPAR growth.
Labor remains a top concern for the industry. How are you working to attract—and retain—employees?
Beukema: We have always believed that a strong culture is the foundation of a thriving team. We are fortunate to be in a solid position with our hourly workforce, thanks to our long-standing commitment to fostering an engaging and supportive workplace. Our focus on career development has allowed us to promote several promising young leaders from within—something that remains one of my favorite aspects of this business. Investing in our people not only strengthens our company but also enhances the overall guest experience.
Beyond internal promotions, we have also welcomed seasoned industry professionals to our leadership team. David Hale has joined us as VP, business development, bringing a wealth of experience and a fresh perspective to our growth strategy. We’ve also added Matt Hughes as VP, operations. With his extensive background in operations and finance, Matt will play a key role in leveraging actionable data to drive efficiency and performance as 6PM onboards these new hotels into our managed portfolio. Additionally, he will be collaborating with my wife’s team at AHM to execute strategic initiatives that will have a lasting impact on the industry and hotel performance.
Holmes: Telling our story is a key part of attracting skilled, motivated hoteliers today. Senior leadership at Ivy Hospitality is filled with individuals who began their hospitality journey in property-level roles. These experiences help our leaders recognize the challenges hotels face each day and how to adjust processes and expectations based on the market.
Our story is a vital part of our recruitment process, and we adjust our messaging slightly for associate and hourly workers to show how we embrace property-level feedback. For example, in February, we sent two associate satisfaction surveys to all our properties to understand what went right during the transition to our portfolio and what we can improve. Following this survey, we responded with executive actions to correct processes or create a positive impact. We must show associates we are acting in their interests, while also taking a creative approach to recruiting.
Loughran: Our goal in all our markets is to be the employer of choice. We know that happy associates will attract more of the same, which is key to success in our industry. We have invested in state-of-the-art labor analysis tools and upgraded our financial management backbone this past year, already seeing significant improvement in labor management and reducing our reliance on outsourced labor. We also recognize that a strong company culture still matters when it comes to attracting and retaining the best talent. This includes giving back to our communities. In April, Concord will participate in our 16th Share Day, which will include six events in various cities across the country where we partner with Feed the Children. We will serve 2,400 families more than 67,000 meals in our communities. Company leaders and hotel associates will also be volunteering in a variety of other ways, assisting shelters and food banks.
Beyond labor, what are the biggest challenges you are facing right now?
Beukema: If there’s one thing the industry deserves after the challenges it has faced in recent years, it’s supply chain stability. Whether you’re a developer or an operator, the unpredictability of costs and availability remains a significant hurdle. Running hotels is already complex, and factors such as rising labor costs, the ongoing bird flu outbreak and new tariffs are adding even more pressure on margins.
From a development standpoint, we are eager to see some cost stabilization to make new projects more viable again. The fluctuating cost of materials and extended lead times continue to challenge the feasibility of renovations and new-build projects. While we remain committed to pushing forward, we hope to see conditions improve so that the industry can gain some much-needed momentum.
At the same time, rate growth remains a critical issue. Since 2019, our industry has lagged behind inflation, squeezing margins and making it difficult to reinvest in our properties, our teams and future development. Getting rate growth back in line is essential—not just for the health of individual businesses, but for the overall vitality of the industry. When margins are strong, everything improves, asset values rise, new projects become viable and reinvestment in our hotels and teams becomes more sustainable. Stabilizing costs and restoring rate integrity go hand in hand in ensuring a stronger future for hospitality.
Holmes: Our most significant challenge today is increasing operating expenses without further impacting labor costs. The hotel industry expected growth in ADR to occur early in 2025, but it has yet to materialize. When demand is down, we have to shift our operating strategy, and today’s hoteliers are balancing growth in ADR and occupancy that few properties planned for. In this environment, it can be a challenge to balance expense margins and maintain profitability, and we have our eyes on that.
Loughran: In Q1 and Q2, we are experiencing government travel-related cancellations. Additionally, there is a slight downturn in demand from Canada, primarily in our Northeast and Florida hotels. While there is some turbulence in travel with the recent changes in political policies, we are confident we will continue to see positive revenue growth in hotel RevPAR and food and beverage income. Group revenue shows positive pace for the majority of the next nine months, and there continues to be a gradual climb in corporate transient demand. We hope to see consumer confidence improve and support our summer leisure programming.
How do you expect the rest of 2025 to go?
Beukema: We are holding onto our optimism despite the ups and downs of the year so far. While Q1 has presented some challenges, we believe that a strong summer travel season will help make up for any lost ground. Families are eager to get out and explore, and we are positioning ourselves to capture that demand through strategic marketing and operational excellence.
We are also pressing ahead with our development pipeline, with three new projects and three property improvement plans (PIPs) in progress. Our focus remains on executing efficiently, supporting our teams and ensuring that we are well-positioned for long-term success. Despite the challenges, we are confident that 2025 will be a year of growth and opportunity.
Holmes: We are optimistic hospitality fundamentals will continue to improve in Q2 and Q3. Our goal is to evaluate and refine any systems we are implementing over the next six months to ensure they are effective and working as intended. From the independent hoteliers’ standpoint, we are fortunately starting to see demand at their properties resume. Leisure and group travelers are returning on weekends, and independents benefit from surprising midweek pickup in bookings. There are many reasons for optimism, and we are here to help hoteliers pivot strategically when they need to.
Loughran: We are very excited about our investments in internal infrastructure for Concord and continue to refine our processes. At the beginning of the year, our accounting leadership team proposed a new deployment structure designed to provide more oversight, support and customer alignment, which we are already seeing great momentum from. Additionally, we continue to leverage new scaled procurement opportunities. All of this should result in optimizing our flow-through in 2025.
