With Thanksgiving a day away, the holiday travel season kicks off with record-breaking projections. This year, AAA predicts that a staggering 80 million Americans will travel for Thanksgiving, surpassing last year’s record-breaking figures by 1.7 million people. With the Transportation Security Administration (TSA) preparing to screen over 18 million travelers in just a week’s time, the hospitality industry is gearing up for one of its busiest seasons yet. Despite these promising numbers, budget-friendly hotels are navigating slower revenue growth and shifts in travel patterns, according to a report from JLL.
Two Key Shifts Impacting the Holiday Travel Season
This year, two significant changes are expected to shape the U.S. travel and hospitality landscape:
- A shorter Holiday Window: Thanksgiving falls a week later this year, shortening the window between Thanksgiving and Christmas by five days. Not only will this potentially impact retailers, but it could lead to a dip in hotel occupancy, due to the travel compression as travelers adjust their plans to fit the tighter schedule.
- Midweek Holidays: Christmas and New Year’s Day, which landed on a Monday last year, now fall on a Wednesday. While Monday holidays typically boost hotel stays by creating extended weekends for travelers, midweek holidays tend to have the opposite effect, often reducing the length of stay.
A Mixed Forecast for the Hospitality Sector
The hospitality industry enters the holiday season with a mix of cautious optimism and signs of vulnerability. Certain segments of the hotel sector struggle with declining domestic leisure travel by cost-conscious consumers while other luxury and urban hotels are benefiting from the resurgence of corporate, group, and international travel. As travel trends improve overall, especially as the holiday season gets into full swing, investors are giving more attention to hospitality assets. According to data from the LightBox RCM platform, listings of hospitality assets increased 73% year over year in October and November compared to the corresponding months of 2023, with the majority of listings in California, Texas, and Colorado.
Five Hospitality Trends to Watch
As the hospitality industry transitions from 2024 into 2025, the sector is experiencing diverse trends that present unique opportunities for commercial real estate investors, owners, and developers. Here are five trends to watch and notable hotels that are exemplifying these trends:
1. Luxury Hotels Thriving: Four Seasons Hotel New York
The luxury hotel segment has made a resurgence and is currently seeing “insatiable demand from consumers,” Erin Green, vice president of development and acquisitions at Auberge Resorts Collection, said during the Lodging Conference in October. The Four Seasons Hotel New York is betting big on this trend. Recently reopened after a four-year hiatus, the Four Seasons Hotel New York has reestablished itself as a premier luxury destination. Located in Midtown Manhattan, the hotel offers 368 suites ranging from 500 to 4,300 square feet, with the Ty Warner Penthouse priced at $80,000 per night, making it one of the city’s most expensive accommodations. This reopening aligns with the broader trend of luxury hotels outperforming in urban markets, driven by a resurgence in corporate and international travel.
2. Eco-Friendly Initiatives: The Source Hotel, Denver, Colorado
Sustainability was a key trend identified for 2024 that saw hotels adopting eco-friendly initiatives to meet growing consumer demand for responsible travel. This includes energy-efficient operations, waste reduction, and sourcing local, sustainable products. The Source Hotel in Denver exemplifies the growing emphasis on sustainability within the hospitality industry. This eco-conscious property integrates green building practices, including energy-efficient systems, responsible water consumption, and locally sourced materials. Rooms feature operable glass garage doors as windows, giving the guests a sense of the outdoors inside. Its commitment to environmental responsibility appeals to a growing segment of eco-aware travelers and aligns with global sustainability goals, making it a compelling case for investors focusing on green developments.
3. Adaptive Reuse: St. Louis Union Station Hotel
Adaptive reuse—the practice of repurposing existing structures for new functions—has become a significant trend in the hospitality industry, particularly in the creation of experiential hotels. This approach often preserves historical architecture and offers guests unique and immersive experiences that standard hotels may not provide. Included among the top 25 adaptive reuse hotels of 2024 by Historic Hotels of America, the St. Louis Union Station Hotel stands out for its remarkable transformation. One of the nation’s largest and busiest train terminals in the late 1800s, Union Station was home to 22 railroads and 32 tracks at its peak. Now, it is the site of the St. Louis Union Station Hotel, part of Hilton’s Curio Collection. In the heart of St Louis, a family entertainment destination, the property features fully renovated guestrooms, train-themed suites, and event spaces within its Grand Hall, adorned with restored stained glass and ornate plasterwork. The complex includes attractions like the St. Louis Aquarium, St. Louis Wheel, and a 3D light show. Recognized as a National Historic Landmark, this hotel offers a unique blend of history and entertainment.
4. Wellness-Focused Hospitality: Miraval Berkshires Resort & Spa, Massachusetts
The global wellness tourism industry is projected to reach $1.3 trillion by 2025, highlighting the significant economic potential of wellness-focused hospitality. This growth reflects travelers’ increasing willingness to invest in health-enhancing experiences during their journeys. Miraval Berkshires Resort & Spa caters to the increasing demand for wellness tourism. Offering comprehensive wellness programs, including spa treatments, fitness classes, and mindfulness workshops, the resort provides an immersive experience that promotes holistic well-being. The emphasis on wellness aligns with current consumer preferences, positioning such properties favorably in the market.
5. Experiential Travel: Under Canvas, Various Locations Throughout the U.S.
Experiential travel has become a significant trend in the hospitality sector, with travelers increasingly seeking authentic and immersive experiences. Dan Voellm, MRICS, CEO & Founder of AP Hospitality Advisors, noted that “off-the-beaten-path destinations are gaining traction among travelers seeking unique and less commercialized experiences globally.” McKinsey & Company projects that the experiential travel market could exceed $1 trillion by 2025. Tapping into this trend, Under Canvas offers luxury “glamping” experiences near national parks across the U.S. By providing upscale accommodations in natural settings, it appeals to travelers seeking unique and immersive experiences. This model demonstrates how innovative concepts can capture market interest and drive occupancy rates, offering valuable insights for developers exploring experiential hospitality projects.
As the holiday season unfolds, the hospitality industry navigates a dynamic landscape, balancing evolving travel patterns and consumer preferences. These trends reflect the sector’s resilience and its opportunities for innovation and growth in the years ahead.
A Note of Gratitude from us at LightBox:
As we reflect on this busy holiday season, all of us at LightBox want to express our gratitude to you—our readers—for continuing to engage with our insights. Backed by robust data and industry expertise, our insights are designed to keep you informed and ahead in an ever-evolving landscape. Thank you for making us part of your journey.
Subscribe To Insights
Be the first to get the latest news, updates and insights from LightBox.
