High costs, tighter pipelines and shifting guest expectations are reshaping how hotel owners and developers invest, build and operate in today’s market. To understand how they’re navigating these pressures, Hotel Business spoke with Mary Beth Cutshall, chief growth officer, Vision Hospitality Group; Robert Finvarb, owner/CEO, Robert Finvarb Companies; and Brittney Jones, chief development officer, Brittain Resorts & Hotels.
—Gregg Wallis
What are the biggest challenges you’re facing in today’s market?
Cutshall: The hospitality industry is experiencing a period of both opportunity and constraint. The most significant challenges we’re facing include rising costs, compressed development pipelines and an evolving guest expectation landscape.
On the cost side, interest rate volatility and supply chain disruptions have made new developments more difficult to underwrite, extending timelines and reducing the number of viable deals. Meanwhile, the labor market remains tight, pushing operating costs upward and forcing operators to rethink staffing models and service delivery.
Additionally, the shift in traveler behavior—from traditional business travel to blended “bleisure” and experiential stays—means that hotels must be more flexible in design and programming to remain relevant. It is something Vision Hospitality Group has done for several years so we think we are well positioned to maximize opportunities now and in the future.
Finvarb: The hotel business is always evolving, but the current environment presents a very different mix of challenges than we’ve seen in prior cycles. Two that stand out are slower international travel—especially from markets like Canada and South America—and continued difficulty attracting and retaining top talent, particularly in operations and food and beverage. It’s a people-driven business, and the ability to recruit and motivate the right team has become a real differentiator. This is precisely the reason why Brian Vujnovic and I formed MIA Hospitality Management as building our own operating platform will provide us with the ability to build the right team at each of our properties.
Beyond those, several structural issues are impacting every owner and operator: 1) rising costs across the board; 2) high construction and financing costs; 3) changing guest expectations; 4) shift in demand mix.
Ultimately, it’s a balancing act: managing costs and capital prudently while still investing in people, design and experience.
Jones: There’s a real push-pull dynamic right now. Demand remains healthy in leisure and experiential travel, but expenses are outpacing revenue growth across the industry. Labor, insurance, utilities and service contracts reflect a materially different cost environment than even a year or two ago. Because of that, the focus has shifted toward protecting margins. We’re being more intentional about operational efficiency and looking for thoughtful ways to expand ancillary revenue streams that enhance the guest experience, not dilute it. The challenge is maintaining the level of service and personalization guests expect while ensuring the business remains economically resilient.
How are rising construction and operating costs shaping your development plans?
Cutshall: Rising costs have required us to be far more strategic and selective with new developments. Construction costs have escalated across every line item—materials, labor and financing—so we’re focusing on high-barrier, high-demand markets where long-term fundamentals justify the investment. We’re also leveraging scale and partnerships to lock in pricing and efficiencies early in the process.
On the operating side, technology and our approach to building efficiencies are helping offset some costs—everything from automated systems to mobile check-in and digital guest engagement tools that streamline labor demands.
Ultimately, development is in Vision’s DNA and we’re not stepping away from development, but we continue to be disciplined—prioritizing quality over quantity and ensuring every project aligns with our brand strategy, investor return expectations and market trajectory.
Finvarb: Rising construction and operating costs have forced all of us in the industry to be far more strategic and selective about new projects. For me, it’s not about slowing down—it’s about being smarter with how and where we invest. At Robert Finvarb Companies, we’ve always believed in disciplined growth built around strong fundamentals: high-barrier-to-entry markets, long-term partnerships and diversified demand drivers. The current environment only reinforces that approach. We’re being very intentional about selecting markets where rate strength, institutional anchors and long-term demographic trends justify the investment. On the development side, elevated construction and financing costs mean we’re spending more time in early-stage design and value engineering to ensure every square foot contributes to performance. We’re also leaning into mixed-use programming—integrating food and beverage, rooftop and parking components that create multiple revenue streams and help offset higher carrying costs.
Jones: Rising construction and operational costs have pushed us to be more disciplined in our approach. We are evaluating projects with tighter cost controls, clearer scope definition and stronger alignment around long-term operating efficiency. Having design, procurement and project management in-house allows us to manage inflationary pressures more proactively, making sure that what we build is not only compelling from a guest standpoint but also sustainable from a margin standpoint.
Which hotel types or locations are seeing the most demand from guests and investors?
Cutshall: We’re seeing sustained demand for select-service and lifestyle hotels in urban and high-leisure markets, especially where experiential and local connection drive guest decisions. Markets with strong leisure fundamentals—like the Southeast, Mountain West and secondary urban hubs—continue to outperform due to migration trends and flexible work culture. From the investor side, there’s a growing appetite for assets that combine lifestyle programming with operational efficiency. These appeal to both travelers seeking authenticity and investors looking for resilient cash flow.
Finvarb: See my response for the second question.
Jones: Leisure-driven destinations throughout the Southeast continue to show strong performance. We’re seeing sustained demand for independent and branded resorts, boutique hotels and condo-hotels that offer differentiated experiences and thoughtful programming. We have also seen continued interest in outdoor and experiential hospitality, including RV resorts, yurts, cabins and other nature-focused lodging concepts that provide a sense of escape and discovery. The properties which are performing best are those that are distinct in identity and deliver experiences that feel meaningful, not standardized.
What’s guiding your investment strategy as the market evolves?
Cutshall: Vision’s investment strategy is grounded in discipline, trusted strategic partnerships and a long-term perspective. We’re focusing on core growth markets with durable demand drivers in markets where we have operating depth and development expertise. We continue to believe in proven core brands for our portfolio, balancing premium select-service with upscale and lifestyle hotels to manage risk and capture different demand segments. We continue to be guided by the principle of “building smarter, not just more.” That means working with our strategic partners and aligning every project with Vision’s purpose—creating places that inspire, connect with the communities we serve and strong perform over the long term.
Finvarb: Our investment strategy has always been grounded in discipline, patience and a long-term view. The current environment only reinforces that philosophy. We’re very focused on building in the right markets—those with a strong and diversified mix of demand generators such as universities, medical centers, innovation districts and cultural or lifestyle anchors.
Jones: At Brittain,we are being more selective and intentional in our growth, with a continued focus on leisure destination markets where we know demand is durable. While much of our experience is in the independent space, we’re also pursuing branded opportunities in key destinations where the scale, key count and ancillary revenue potential support both strong top-line performance and margin flow-through. That same lens applies to independent resorts and boutique properties. We prioritize assets where we can create value through programming, amenities and thoughtful revenue diversification.
