Six key changes and factors are changing the shape of the hospitality industry this year, according to Deloitte’s Future of Hospitality report.
So what’s changing the industry this year?
Consumers Changing the Game
Technologically savvy travelers are changing the game, less interested in brand loyalty and more interested in their social media feeds to steer their travel interests and desires.
There have also never been more digital nomads: 11 percent of the American workforce describe themselves as such, often combining work with travel.
Rising economic stressors are also creating later bookings, shorter trips and cheaper reservations for cruising, specifically—but the economic uncertainty is rippling out to the wider travel industry, too. Greater demand for discounts and increased ways to use loyalty rewards points are on the rise.
Attracting Customers
Woman uses smart phone to check travel plans (Photo Credit: Have a nice day, Adobe Stock)
Hospitality has a big job: attracting travelers. AI search and influencer content are becoming major focuses of attention and travel trends online, and traditional SEO and technology campaigns might fall short as the Internet—with all its shiny baubles—changes rapidly from one trend to the next. Staying ahead of the curve will become a new challenge.
Short-term vacation rentals also remain extremely popular alternatives to traditional accommodations like hotels, making hotels get creative with how they market themselves and with what they can offer their guests.
Economic Development Slows
In the United States, economic uncertainty has slowed the historic rise in hotel and hospitality development of the post-pandemic travel industry. In fact, the number of hotels under construction in the U.S. hit a 5-year low in the middle of 2025, due to construction costs and supply chain issues due to rising tariffs, high interest rates and more.
The slowing down seems to be ignoring the cruise sector, though, largely due to its more globalized economy that’s less dependent on U.S. economic health: 56 new ocean vessels are on-order to be delivered through 2036, representing $56 billion in investments.
Overtourism & Its Backlash
With overtourism a major buzz word, and a major headache for residents of major touristed cities worldwide, housing prices are soaring, streets are being overcrowded, wastewater from cruise ships pollutes ports and the world is stressed.
The hospitality industry has a challenge ahead of itself: how does it expand when residents are increasingly hostile to tourism’s growth? A more sustainable, responsible economic model might be able to replace the endless growth model that many major hoteliers strive for.
Workforce Limitations
Housekeeping staff member working at a hotel. (Photo Credit: Adobe Stock/rh2010)
A problem since the pandemic ended, hospitality companies still struggle to attract and maintain enough workers to staff their hotels. While wages have increased, recruitment is slow, still at 88 percent of 2019 staffing levels.
Some hotels are offering select-service formats with a reduced staff, while others are considering converting hotel restaurants to self-service formats or closing them altogether. Additionally, technology is increasingly important for employee productivity, with 49 percent of hoteliers integrating AI as a tech initiative.
What Should the Hospitality Industry Focus on This Year?
Deloitte offers some recommendations for the industry to consider.
First, they must rethink demographics, deepen engagement with younger generations and new audiences and reevaluate how they operate and appear online in the shifting digital landscape.
For example, they could use AI to make their experiences more intuitive and immersive, as well as to automate some parts of operations, should they choose to embrace it.
Hospitality companies should prioritize expanding in a way that spreads its brand further, and adjust messaging based on current travel patterns and the socioeconomic conditions of the day.
The industry should also consider investing more into employee training, especially with technology.
Lastly, companies should operate with integrity—as the report says, “Consumers, regulators and investors expect hospitality businesses to operate transparently, legally, ethically, and with integrity.”
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