🍍 the biggest opportunity in hospitality now

January 06, 2025 | Read Online

Hoteliers' Biggest Opportunity in 2025

by Josiah Mackenzie

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As you may know, I’m doubling down on research with and for you here at Hospitality Daily to give you insights to act on this year. After surveying hundreds of hotel owners, operators, and brands over the past few months for the State of the Hotel Industry research project, I want to share some of the things that stood out to me with you today.

My top takeaway: 2025 will be about driving profits through better guest experiences.

Why?

Financial performance - revenue generation and profitability - ranked as the industry’s top challenge now.
When asked what excites them most, respondents overwhelmingly said, “innovating in guest experience delivery.”
Putting these two data points together, I see both the need and desire to innovate in guest experience to drive financial performance.

Listen to my thoughts on this today on the Hospitality Daily Podcast, or scroll down to keep reading more takeaways.

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To give you the answer to that question, I’m gathering input from professionals across the hospitality industry, and would really appreciate your help on this project. In exchange for your participation, I’ll send you an exclusive summary of what I find. These insights will enable you to compare your experiences with others in hospitality and uncover practical ways to use AI in your work and business in 2025.

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FEATURE STORY

Guest Experience Innovation: Hospitality’s Path to Profitability in 2025

As mentioned above, I've been analyzing data from our comprehensive survey about what's happening in the hotel industry today. The survey included input from people across the ecosystem - those on the front lines of providing hospitality, people managing individual hotels, hotel management companies, ownership groups and investment companies, hotel brands, asset managers, and technology providers.

A few key things stood out…

1) This will be the year of driving profitability through innovating in guest experience

Two data points led to this takeaway for me.

First, when looking at survey responses from hoteliers (people either working on property or in a corporate role, not including advisors or technology companies), their biggest day-to-day challenge was revenue generation and profitability - more than any other challenge the industry faces. The second data point came from asking what part of hospitality excites people the most right now. The most common answer was innovating in guest experience delivery.

Combining these two data points makes me believe that 2025 is going to be the year of driving profitability through improving the guest experience.

This might sound a bit obvious, but any action by anyone, especially within business (and this is absolutely true for hospitality), is always a function of two things - what pain you’re driven to fix and what you want to move toward because you see the potential there.

What's magical about the hospitality industry is when you innovate to improve guest experience, it creates a powerful chain reaction. Delighted guests not only return to your property, but they also recommend it to others. This word-of-mouth marketing is both free and incredibly effective. These satisfied guests develop real loyalty to your business, leading them to book directly rather than through third-party channels. Direct bookings have lower acquisition costs, which ultimately increases profitability.

2) Hoteliers are looking to people to succeed in 2025 (more than tech)

When asked about what resources or support would most help their hotel or hotel business succeed in 2025, the most common answer was people - whether that's more staff or better talent.

Hoteliers are looking to people, more than tech, to succeed in 2025.

There are a number of ways you could interpret this. It could mean either that you need people who know how to use technology to drive results from it, or that there's a misunderstanding in the industry about how technology can drive significant change.

I think it’s a mix of both.

3) Hoteliers see fastest ROI from people, but biggest ROI over time from tech

In the study, I also asked about what investments would have the highest ROI and saw a divergence in the answers depending on the time horizon.

For this year, hoteliers believe two areas will drive the highest return: staffing and talent development, and marketing and sales. Technology ranks lower on that list, as do revenue strategy and investing in guest amenities and services.

However, looking at the next five years, hoteliers believe technology and automation will drive the highest ROI.

This might indicate that hoteliers think it takes time to see technology benefits, though as someone more optimistic about technology, I think this could be the result of experiences with subpar technology. Great tech should deliver high ROI quickly.

Hard Truths on Hotel Tech: Unfiltered Insider Advice - Josiah Mackenzie

Josiah Mackenzie has spent over 20 years building, selling, and buying technology. In this tell-all episode, he shares his insider's guide to buying, implementing, …

podcast.hospitalitydaily.com/hotel-tech

4) Hoteliers want more AI (and owners will push for its use)

One final point worth mentioning, given the findings above, is that three out of every four hoteliers in the study do want to see more AI used in hospitality now.

Even more interesting is that hotel owners and investors were the most excited about AI of all groups. To me, this suggests we're going to see much more focus on and investment in AI this year because typically what hotel owners and investors want has a lot of sway in what actually happens in hotels and hospitality.

You can see charts from the survey mentioned in this article here. The full data set from the survey mentioned here was provided to those who completed the survey, but there’s still a way for you to get it: Take my AI in hospitality survey here, and you’ll get instant access to the state of the hotel industry survey results upon completion.

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A few final things:

If you have any thoughts, ideas, questions, or suggestions for Hospitality Daily, please reply to this email. I’d love to hear from you!
If you have something that would benefit the hospitality professionals who read, listen to, and watch Hospitality Daily, let’s work together to help you help more people.

Thank you for reading.

-Josiah