During The Lodging Conference last week in Phoenix, hospitality leaders — from CEOs to brand executives to industry advisors — were overwhelmingly optimistic about the future of the hotel industry.

But the experts also mulled over obstacles the industry faces, in addition to sharing opportunities for growth across the hospitality sector.

Among the conversations, several trends stood out: the forthcoming uptick in hotel transactions, the rise in unique guest experiences and the continued positioning of extended stay as the “darling” of the industry. However, challenges remain on the labor and tech fronts.

Hotel Dive chatted with experts and sat in on several panel discussions at the conference. Below is an overview of the top hospitality industry trends we heard.

Hotel deal activity is on the rise

Kevin Davis, Americas CEO for JLL Hotels & Hospitality Group, shared that he expects hotel deal activity to pick up next month and into December following additional interest rate cuts. Then, looking ahead to 2025, hotel investment activity will snowball.

“The supply has never been so low, [and] new construction has never been so low, so with the interest rate coming into place, I think the investment horizon is going to be very bright for 2025.”

Arash Azarbarzin
CEO at Highgate

“It’s like a boulder at the top of a hill. It kind of starts small and slowly, but as it starts to go down the hill, it gets bigger and it goes faster. I think that describes what the transaction market will be like next year,” Davis said during a Wednesday morning panel with other industry CEOs.

One of those leaders, Extended Stay America CEO Greg Juceam, agreed, saying that upcoming election clarity, a “huge amount” of anticipated refinancing and an increase in property improvement plans getting underway will also contribute to heightened deal activity.

Dave Pollin, co-founder and president of The Buccini/Pollin Group, meanwhile, said that impending loan maturities will have an impact on deal activity. There will be “a lot more transactions over the next 18 months,” he said during a Monday session.

Roughly $5.8 billion worth of U.S. hotel securitized loans will come due for repayment later this year, catalyzing hotel transactions, according to JLL research from May.

Highgate CEO Arash Azarbarzin shared a similar optimism for hotel deal activity, saying 2025 will “be a great year for investment.”

“The supply has never been so low, [and] new construction has never been so low, so with the interest rate coming into place, I think the investment horizon is going to be very bright for 2025,” Azarbarzin said during a Tuesday panel.

Labor challenges persist

For hotels, finding and retaining employees remains a challenge, and the increasing cost of labor is also putting pressure on owners, according to hospitality professionals at the conference.

“There are markets like New York, Boston and D.C. that have great supply and demand fundamentals, although the labor issues that you’re seeing in some of these markets are causing a bit of unknown,” said Ben Rosenbaum, managing director at Starwood Capital Group, during a Monday session.

In Manhattan, for example, the growth rate for occupancy, ADR and RevPAR was robust in the second quarter of this year, according to PwC. Meanwhile, there are ongoing disputes over regulations that could impact hoteliers’ hiring abilities in New York City.

The hotel labor market is also experiencing unrest in Boston, where last week hundreds of workers launched an open-ended strike, demanding higher wages and better working conditions. The workers are among thousands of hotel employees nationwide seeking similar contract changes.

Other industries are paying much higher wages, leading hospitality workers to go in search of opportunities elsewhere, Asian American Hotel Owners Association Chairman Miraj Patel noted during a Wednesday panel discussion.

Extended stay remains the ‘darling’ of the industry

Extended stay demand remains strong from both consumers and developers, hospitality pros shared during the conference.

Jason Ballard, head of operations for Hyatt Studios, said extended stay continues to “be the darling of the hospitality industry.”

During Tuesday’s “Keep the Momentum Going: Extended Stay” panel, Ballard shared that Hyatt Studios has some 4,000 rooms in the pipeline. Across brands, extended stay has dominated the U.S. hotel construction pipeline so far this year, according to Lodging Econometrics.

Mark Williams, managing director of franchise development at Extended Stay America, said during the panel that extended stay will continue to be desirable in markets where there are hospital networks, universities and military bases. Additionally, there will be demand near ongoing construction projects, like in Phoenix where there’s been heightened infrastructure spending, Williams noted.

Jim Tierney, senior vice president of development and owner relations at Hyatt, said he is seeing the most interest in extended stay products in the midscale and upper midscale segments.

Last year, Hyatt broke into the upper midscale extended stay space with its Hyatt Studios brand. Meanwhile, Marriott International entered the U.S. midscale segment last year with its extended stay brand StudioRes.

Tierney told Hotel Dive that the inaugural Hyatt Studios location in Mobile, Alabama, is slated to open in the first quarter of 2025.

Integrating technology is a balancing act

Hotel companies are increasingly integrating technology to enhance the guest experience, but it remains a balancing act to not lose the human touch, experts shared at the conference.

“We don’t think that AI should touch the guest.”

Dina Belon
President at Staypineapple Hotels

“The guest experience is critical,” John Murray, president and CEO at Sonesta Hotels, said during a Tuesday panel. “There are a lot of ways where I think AI can help us help guests have better experiences, and we’re studying opportunities there currently, but we’re trying to also balance it with the need for that hospitality experience to be personal.”

Dina Belon, president of boutique hotel brand Staypineapple Hotels, echoed the sentiment, saying the integration of too much technology can lead hotels to “lose the humanity of the business that we’re in.”

“We don’t think that AI should touch the guest,” Delon said. “AI should be an element that is supporting the team members. It’s not going to replace team members. What it’s going to do is give team members the ability to have easy access to information that they need at their fingertips and when they need it.”

Geoff Ballotti, president and CEO of Wyndham Hotels & Resorts, said during a separate Tuesday session that AI helps lower costs for Wyndham owners and “improve[s] the communication along the way with that guest, from the minute they book to checkout.”

In July, Wyndham rolled out Wyndham Connect, a guest engagement platform designed to “elevate” the guest experience with mobile tipping and AI-powered messaging.

Guests increasingly seek experiences

Hotel guests, particularly those in the rapidly expanding luxury lifestyle segment, want offerings that are “different, experiential, memorable [and] desirable,” Jenna Jacobson, vice president of luxury and mixed-use development at Marriott International, said during Tuesday’s “Capitalize on Luxury Demand” session.

This changing demand comes after the “experience economy took over the material or the goods economy” in recent years, according to Mitch Patel, founder and CEO of Vision Hospitality Group.

“[Lifestyle] hotels are just not a place to rest, a bed, a shower. Sure, you have to nail down those fundamentals of what we do in hospitality, but if you could absolutely provide that guest a better experience, then I think that you are separating yourself from the competition,” Patel said during a Monday session.

Incorporating local art, providing entertainment or programming and serving indigenous cuisine are some of the ways hotels can up their experience game, hospitality pros shared.

Amy Hulbert, vice president of boutique and upscale brands at BWH Hotels, said leveraging partnerships can be an innovative way to provide experiential accommodations.

BWH Hotels has partnered with hair salon chain Dry Bar to provide guests with luxury hair care products, Hulbert noted. With this type of partnership, the guest “starts to associate those higher[-end] brands with the [hotel] brand that they’re in,” Hulbert said. And it applies to food and beverage too, where BWH partners with chefs.