HOSPITALITY ‘There has to be a ceiling’ on rates


consumers driving the launch of sub- brands. Two other trends are branded residences – a key segment on the rise – and extended stay, driven by generational travel such as grandparents travelling with their kids and grandkids. We’re also seeing more emphasis on micro-type hotels and a lot of interest in wellness, with brands launching wellness-focused sub-brands.” She noted: “Rising costs are still a


concern. Our sentiment survey showed managing cashflow and improving performance to be the top-two priorities. But more than half the respondents expected to fuel growth through acquisitions – whether vertical, horizontal or through strategic partnerships. M&A deals are still taking a while to complete. There is a lot more scrutiny. But compared to last year, when we saw a massive gulf between buyer and seller expectations, we’re seeing more appetite to get deals done. Sellers are more open to realistic valuations.”


‘NO GAME-CHANGING APPLICATIONS’ Digital technology is playing an increasing role and “mitigating some of the staffing challenges”, according to Jiwnani, who said: “Technology can help optimise and streamline operations and back-office processes, allowing staff to focus on delivering enhanced guest experience.” She noted: “Hospitality companies are


becoming more flexible in terms of what they demand from employees – offering more-flexible contracts, tapping into groups like the over-55s. But staffing is still a problem. The biggest issue is among frontline staff because they tend to work more unsocial hours.” Jiwnani added: “We’re seeing increased


interest in how generative AI and virtual reality can enhance the guest experience, for example by having a virtual assistant help consumers book and tailor their stay. Some big brands are replacing hotel concierge services with virtual assistants. %DVHG RQ D JXHVW SURILOH D FRQFLHUJHbERW FDQ recommend restaurants, bars or experiences. Concierges are still needed, but technology


46 Travel Weekly Insight Report 2025


There needs to be the right balance between what hotels do in terms of environmental, social and governance policy and being able to deliver what guests want


can increasingly provide the equivalent level of service at possibly a lower cost.” However, she suggested: “There have


been no game-changing applications because the essence of hospitality is human interaction and providing the right level of service. Technology’s role is in facilitating a better experience, whether streamlining back-end operations or allowing guests to personalise experiences. “The hyper-personalisation of the guest


experience is big across all hospitality segments. An example would be using virtual reality to allow a customer to see which room they want to book. Another element is around the amenities in a room. Some limited-service hotels offer the bare basics, a bed, pillow and shower, and everything else becomes an add-on. Another hyper-personalisation point is around the connectivity in a room to things you have at home – linking the TV to your Netflix account, for example – and choosing the stock in the minibar.” She said: “This tends to be more


RISING costs and labour shortages pose the greatest risks, according to hoteliers (Figure 66)


common at the bottom end of the market. Guests paying more for a hotel room expect to have everything included.” Attracting members of the local community to hotels has become “more important than ever”, said Jiwnani,


FIGURE 66:


RISKS TO HOTEL SECTOR IN 2025 % of hotel owners/investors


Workforce challenges Rising costs


Lack of economic growth Political tension Interest rates


Technology disruption/cyberattack


Overtourism/resentment towards tourists


0 28% 67% 53% 49%


10 20 30 40 50 60 70 80 %


Source: Deloitte European Hotel Industry and Investment Survey 2024 79% 77% 71% % pt


change YoY


-10 -8 -16


+23 0


+5 +12


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