As 2025 gets underway, hospitality leaders are evaluating how to adapt their hotels to a changing world. The economic landscape and hotel construction financing environment are different from a year ago. This year's travelers are also evolving: more luxury hotel guests are seeking cutting-edge wellness services, while family travelers often bring along multiple generations.

Hotels are doubling down on providing the cultural immersion experiences guests expect, while also accommodating a significant number of group travelers. Meanwhile, renovation projects are dominating the hotel construction pipeline.

Hotel Dive spoke with several hospitality leaders about their industry predictions for 2025. These trends they shared will impact hotel operations, hotel technology, amenities, and more.

Hotel investment activity reaches new highs

In 2025, hotel industry professionals can expect hotel investment to accelerate against a backdrop of cooling interest rates, improved lender sentiment, and healthy travel demand.

The interest rate cuts in the fourth quarter of 2024 have been "very positive so far" for hotel investment, Greg Perry, vice president of hotel investments at RREAF Holdings, told Hotel Dive. Zach Demuth, global head of hotel research at JLL, told Hotel Dive that more rate cuts are expected in 2025, which could stimulate future hotel investment.

"If there is one theme for 2025, it is that growing group demand will be a key driver of our business this year."

— Greg Perry, Vice President of Hotel Investments at RREAF Holdings

Additionally, more lenders are encouraged by market conditions, so "available, more fairly priced capital is coming," Perry said.

Strong group travel will also drive hotel investment in 2025, Perry believes. "If there is one theme for 2025, it is that growing group demand will be a key driver of our business this year." As more corporate groups gather in cities, urban hotels will be attractive to investors, Demuth noted.

"Urban markets will drive investment demand this year," Demuth said. "Resorts were the darling of the post-pandemic era. Leisure demand was ridiculously high, and investors really wanted to profit from it. Leisure demand is still strong, but it has clearly pulled back from its peak. On the other hand, urban markets are exceptionally strong. Places like New York, Chicago, New Orleans, Nashville—leisure demand is still there, but what we're really starting to see is the recovery of group travel, business travel, and international travel."

Perry agrees that urban markets will see strong investor demand this year, but he notes that secondary suburban markets "will be the real winners going forward," as extended-stay hotels remain the industry's "darling" in 2025.

In terms of deal size, Demuth says investors are showing "enormous" interest in high-quality, irreplaceable assets valued at over $250 million. He cited the $725 million sale of Turtle Bay Resort in Hawaii, the $400 million sale of W South Beach in Miami, and the $1 billion sale of the Hyatt Regency Orlando. Demuth also noted significant investor interest at the other end of the spectrum—"extended-stay, lower-tier select service, under $25 million."

"We expect to start seeing a return to the mean this year, with more mid-sized deals. While they may not be as flashy as those $500 million transactions, this is what the industry really needs."

— Zach Demuth, Global Head of Hotel Research at JLL

In 2025, there will be more mid-sized deals valued between $50 million and $150 million—"the typical full-service branded hotel," Demuth said. "We expect to start seeing a return to the mean this year, with more mid-sized deals. While they may not be as flashy as those $500 million transactions, this is what the industry really needs."

Perry noted that hotel investors will gravitate toward newer hotels under the Marriott, Hilton, and Hyatt brands. "We still see the 'quality-first' trend that began during the pandemic," he added. The "institutional quality of new brands" will "attract the next wave of large-scale capital into the industry," and hotels in the upper-upscale segment will be especially popular.

Perry predicts that this year's still-elevated inflation environment will not hinder hotel transaction activity. "Being in an industry like hotels, with dynamic daily pricing that can move with inflation, only benefits the portfolio."

Evolving group travel is hotels' biggest opportunity

Group travel is expected to lead other travel segments and become a revenue driver for hotels in 2025.

Groups will continue to travel for corporate meetings, which has historically been the "lifeblood" of the meetings and events industry, Jessica Carey, vice president of customer operations at Cendyn, told Hotel Dive. However, in 2025, more groups will also travel for entertainment and sporting events.

Carey said hotels can reliably fill unused space by partnering with local performance groups to host "small concerts and showcases," securing recurring event venue bookings.

Additionally, sports tourism—the "unexpected winner of 2024"—will continue to thrive in 2025, covering youth and professional sporting events at all levels, Carey noted.

Frank Passanante, senior vice president and global head of worldwide sales at Hilton, expressed a similar view. "Sports travel is surging," he told Hotel Dive, adding that Hilton's global sports sales revenue tripled from 2019 to 2024, with 80% coming from youth or amateur sports.

During the third-quarter 2024 earnings call, MGM Resorts CEO Bill Hornbuckle said sports tourism will be a major opportunity for Las Vegas hotels in the near future.

Both Carey and Passanante noted that meetings business will remain strong this year, with Carey highlighting the "long lead times" for meetings and association events.

"Group travel should be a core component of hotel strategy in 2025. It's a reliable way to bring business to the hotel, especially during times of the year and days of the week when transient business is slow. In today's competitive market, hotels that take a proactive sales approach are winning."

— Jessica Carey, Vice President of Customer Operations at Cendyn

Carey said groups will increasingly travel to secondary markets for both corporate and entertainment purposes. She noted that associations in particular have already been to those big cities—like New York, Los Angeles, and Nashville—and now they are looking at markets like St. Louis and Memphis, Tennessee.

These associations "are looking for more niche secondary markets or smaller primary markets that also have some really interesting cultural activities," Carey said. She noted that more people will add days to business trips to enjoy the destination, even smaller, staycation-like places.

Passanante also noted that "bleisure" travel will continue in 2025. "We've already seen the impact of remote and hybrid work on lodging behavior, with demand for longer stays persisting to make the most of each trip," he said. "Bleisure stays and 'workcations' are on the rise, and employees are taking the office on the road since they can work from anywhere."

To cater to the bleisure trend, many planners "are leaning toward a one-stop-shop approach to maximize attendee experience and streamline planning," Passanante said.

Carey noted that many planners have higher budgets in 2025 than in previous years, and they are looking for unique experiences or add-ons that make events more memorable.

Carey said hotels need to offer unique experiences to win group business. She added that hotels should also consider sustainability and carbon footprint awareness, as well as DEI initiatives and community service programs, which matter most to planners this year.

"Group travel should be a core component of hotel strategy in 2025," Carey said. "It's a reliable way to bring business to the hotel, especially during times of the year and days of the week when transient business is slow. In today's competitive market, hotels that take a proactive sales approach are winning."

Medical science drives high-tech wellness facilities

According to the Global Wellness Institute, the global wellness market is expected to reach $9 trillion by 2028. While wellness services are nothing new for hotels, the types of experiences are changing—and becoming more high-tech.

Experts told Hotel Dive that wellness facilities in 2025 will go beyond routine spa treatments, embracing scientific and technological innovation.

"The future of hotel wellness is technology supporting deeper relaxation, recovery, and rejuvenation, while elevating the overall luxury experience," Meghan Patke, founder and president of luxury travel PR firm Modern Currency, told Hotel Dive.

According to Patke, this future will be driven by smart technology and data analytics, as well as robotics and automation. She noted that offerings like Aescape's massage robots are on the rise.

"One of the major shifts we're seeing is people seeking experiences that seamlessly combine scientific innovation with cutting-edge technology," said Oxana Spivey, vice president of wellness standards at Wellness in Travel & Tourism, an organization that certifies wellness offerings at hotels and resorts. "Travelers are seeking treatments and tools that are not only effective but also scientifically backed."

Combining technology with medical science can produce treatments that promote longevity and athletic recovery. Patke said the treatments she has seen range from IV therapy to biomarker testing.

Luxury hotels are paying attention to this trend. Four Seasons Resort Maui in Hawaii has partnered with Next Health, a Los Angeles-based health optimization and longevity center, to offer "regenerative services" such as NAD+ IV drips, where NAD+ is a coenzyme that promotes energy production in the body.

Meanwhile, Sam Nazarian's SBE is advancing a longevity-focused resort brand that will offer services such as preventive MRI and CT scans, as well as advanced blood diagnostics.

Despite the rise of high-tech wellness services, Spivey said low-tech offerings will still be important. This includes simply getting good sleep, with hotels across segments working to provide better sleep experiences as sleep tourism continues to gain popularity.

"True wellness is a deeply personalized experience—often found in simple nature walks, mindful breathing, and nutritious eating," Spivey told Hotel Dive.

Families travel across generations

"The more, the merrier" seems to be the motto of a growing number of multi-generational families traveling together.

According to Hilton's 2025 Trends Report, about 37% of travelers say they "often" vacation with their parents, and two in five invite extended family members to join them. The rise of multi-generational travel also coincides with the growing presence of Generation Alpha—children aged 14 and under—in hotels, with about 56% of families telling Hilton they choose hotels based on kids' clubs or teen activities.

"Multi-generational travel inevitably means booking multiple rooms, multiple nights, and heavy use of dining and other hotel services. This is an extremely high-spending guest type."

— Alicia Zur-Szpiro, Co-founder of Wanderland London

The multi-generational travel trend presents a significant opportunity for the hotel industry, said Alicia Zur-Szpiro, co-founder of Wanderland London, a children's hotel consultancy.

"Multi-generational travel inevitably means booking multiple rooms, multiple nights, and heavy use of dining and other hotel services," Zur-Szpiro told Hotel Dive. "This is an extremely high-spending guest type. With just a few well-designed and thoughtful amenities for children and teens, hotels can win these bookings, each worth tens of thousands of dollars."

According to Wanderland's "Kids' Hotel Report" released in November, child-friendly hotel services could represent a $175 billion opportunity for hotels globally.

Some hotels and resorts have already seized this trend. Dart Interests' Evermore resort in Orlando, Florida, was "built in response to the growing popularity of multi-generational travel and 'human disconnection,'" Executive Vice President Stewart Brown told Hotel Dive in October.

Timeshare and vacation clubs, such as Holiday Inn Club Vacations and Marriott Vacations Worldwide, are also targeting multi-generational travelers through property expansions and family-friendly amenities.

Hotels offer cultural immersion experiences

Travelers in 2025 are no longer seeking one-size-fits-all hotel experiences. Instead, they want to immerse themselves in the local culture of their destination—and hotels are helping them do just that.

"Wherever travelers go, they are going to experience everything local," Mike Metcalf, president of HQ Hotels, told Hotel Dive. "People are certainly more willing to embrace the local community and get out and see things. That experience doesn't stop when they return to the hotel."

According to Euromonitor International, local immersion and authenticity are driving cultural tourism, with the firm finding that a growing number of "cultural explorers" prioritize travel experiences offering local cultural immersion (64%) and arts and heritage activities (46%).

One area where hotels are offering local cultural experiences is dining. Restaurants and lounges are increasingly focused on providing a "sense of place," reflected in both the physical environment and menus, hospitality experts told Hotel Dive. This trend accelerated in 2024, with hotel restaurants emphasizing local ingredients, said Stephen Toevs, senior director of culinary for the U.S. and Canada at Marriott International.

Cultural travel is especially important to younger travelers, with 50% of Gen Z travelers saying that being able to immerse themselves in local culture is an important factor in choosing a destination.