Accommodation Industry Trends 2025: Key Challenges and Future Predictions

The accommodation sector has always been competitive, made more so by the rise of alternative accommodation models such as Airbnb. To stay above water, traditional accommodation providers need to play to their key strength, creating a welcoming and unique experience for guests through personalized customer service.

To write our Accommodation Industry Report, Expert Market surveyed 417 accommodation professionals working at a variety of sites, from hotels and motels to BnBs, to glean insights on the challenges and opportunities of the industry.

This year, staff retention, rising costs, and increased competition emerged as the key challenges facing the accommodation industry based on the data we collected. Read on to find out more about the challenges facing the industry and how to combat them.

General Accommodation Statistics

Let’s first take a look at key industry and workforce statistics to better understand the state of the accommodation industry as a whole.

The size and makeup of the industry

The US accommodation industry is dominated by small independent businesses, with hotels being the most common type of accommodation establishment. Let’s take a closer look:

• Workforce numbers: In the United States, 1.8 million individuals work in the accommodation industry, approximately 0.5% of the total population.
• Establishment numbers: There are around 57,845 accommodation establishments spread across the US.
• Establishment types: The overwhelming majority of accommodation establishments are hotels, accounting for 72% of the total. The next largest group is motels, accounting for 11%, with BnBs coming in third, accounting for 10%.
• Business size: Most establishments (71%) have fewer than 100 guestrooms, and 43% of manager-owners handle just one establishment.

Ownership models: 50% of accommodation establishments are independent (owner-operated), making up the largest percentage. By contrast, franchises and management company establishments account for 46% of the total.

The workforce

The majority of managers and owners in the accommodation industry are mid-career professionals who have over a decade of experience in the industry. Let’s take a closer look at the numbers:

• Age of managers/owners: The vast majority of managers and owners in the accommodation industry are between the ages of 35 and 54, accounting for 65% of the total.
• Years of experience: Half of all accommodation establishment owners have over a decade of experience in the industry. Managers have slightly less experience, with 50% having between three and nine years under their belt.
• Distribution of responsibilities: Both owners and managers reported that their biggest responsibilities included managing guest experience, and overseeing housekeeping. Managers also listed training staff as a big responsibility, while for owners it was hiring staff.
• Motivations to stay in the industry: Both managers and owners listed social connections as their primary motivation for staying in the business, with 31% of owners listing “creating a memorable experience for guests” as their top motivation, and 26% of managers citing “frequently meeting new people” as theirs.

Challenges and Predictions for Accommodation Industry

The biggest challenges facing the accommodation industry are retaining staff, a volatile economic environment, and increased competition and guest expectations.

Staff retention

Staff retention is the biggest issue facing the US accommodation industry, with 48% of our survey respondents citing it as their most significant operational risk. It’s a slightly bigger concern for managers than it is for owners, which makes sense since managers are typically dealing directly with staff far more often than owners.

When it comes to strategies to improve staff retention and hiring, increasing wages seems to be the most popular, implemented by 34% of respondents. This seems to correlate with the fact that the hardest roles to fill are those of low-wage workers, with cleaning and housekeeping being the hardest roles to fill according to 38% of respondents.

When we compare the responses of professionals in an independent business and professionals in a franchised one, we see that staffing (retention, training, hiring) is a much bigger issue for franchises. 51% of franchise professionals listed it as their top issue, compared to 29% of independent professionals.

This might be linked to reduced spending on hiring and training, with 49% of franchise professionals reporting making cuts to personnel, compared to 34% of independents.

Independents, for their part, are more concerned with economic uncertainty, which we’ll discuss in the next section.

Economic instability and rising costs

Rising costs are another top concern for professionals in the accommodation industry, with 34% of respondents citing rising labor costs as a top upcoming operational, 27% citing rising maintenance costs, and 19% citing rising interest rates.

When we split the data between responses from professionals working in independent establishments, and those working in franchises, we found that more independents list rising costs as a key operational risk than franchise professionals. For example, 34% of independents are concerned about rising maintenance costs compared to 15% of franchises. Additionally, 16% of independents see building rent increases as a top concern compared to just 8% of franchises.

The only cost franchise professionals are more concerned about than independents is rising labor costs. 35% of franchise professionals list this as an operational risk compared to 29% of independents.

We also asked accommodation professionals what key pain points or challenges they faced in their day-to-day roles. Here, we again found that professionals working in independent establishments seem more affected by rising costs than those in franchises. 26% of independent respondents listed economic uncertainty as a top pain point, but no franchise professionals listed it.

Competition and guest satisfaction

Competition from alternative lodging options such as Airbnb is the third biggest challenge for accommodation professionals, with 27% of respondents citing it as an operational risk.

This is closely tied to concerns over guest satisfaction and establishment reputation, since ensuring guests have a pleasant stay is a key part of winning out over the competition.

In fact, 27% of independent professionals and 29% of franchise professionals cited managing customer expectations as a key pain point, while 29% of franchise professionals listed maintaining a positive online reputation as another pain point.

What sets traditional accommodation establishments apart from alternative models like Airbnb are face-to-face interactions with staff and personalized customer service, so, unsurprisingly, keeping the level of service is a key concern. It’s the reason why guests might choose a hotel over a short-term rental.

Expert Market’s View: Our Recommendations for Accommodation Businesses

With labor shortages, rising costs, and increased competition being the top concerns of accommodation professionals, managers, and owners should focus on improving working environments, reassessing their spending, and leveraging technology to help with operations, guest experience, and marketing.

Nurturing staff

The key to hiring a retaining staff is to create a good work environment for them.

While raising salaries can help in the short term, if employees feel overworked and underappreciated, a salary raise won’t be enough to get them to stay in the long term. The importance of proper training shouldn’t be overlooked. If employees aren’t properly taught how to do their jobs they will ultimately feel stressed and burnout, which could push them to quit.

Spending more time and money on making your employees thrive should circle back to you in the end, since happy employees are better at dealing with guests, increasing your chances of repeat visitors.

Related to this, it’s important for hiring managers to prioritize hiring people who love people, as cliche as it may sound. The accommodation industry runs on interactions, and as we’ve noted, most owners and managers cite creating memorable experiences and meeting new people as top motivators for their work. It makes sense for the rest of the staff to feel the same.

Lastly, don’t underestimate the role of technology in creating a better work environment for staff. Tools such as time management systems, PMSs (Property Management Systems),  and POS (Point of Sale) systems can make operations run smoother, and ease the burden on your employees.

Managing costs

Implementing cuts can help ease the economic burden, but it’s important to make sure these cuts don’t affect the guests’ experience. After all, guests are the primary source of revenue, so degrading their experience at your establishment isn’t a good strategy in the long term.

So, what can you do? We suggest you reassess the basics. Look at areas such as the front desk and housekeeping operating hours and see if it’s possible to reduce them without impacting guests. For example, if your front desk is open until midnight but guests don’t stay up past 10 PM, there’s probably no need to have it open. Putting systems in place for guests to indicate when they want towels or bedding changed, can also help reduce housekeeping hours.

Lastly, focus on retaining existing guests and attracting new ones through excellent service, as this will boost income. Make sure you have operational procedures in place for when things go wrong, so your staff knows what to do and your guests feel understood. Poor responses from staff can damage your reputation, and stop guests returning or recommending your establishment to others.

Updating the technology you use, although an initial expense, can also save you money in the long run. For example, VoIP phone systems that operate using an internet connection are typically better value than landlines, although their adoption has been a little slow – only 21% of US accommodation businesses use them.

Leveraging technology

Investing in technology can be a way to future-proof your business, and data from our survey indicates that technological improvements are a key trend in the accommodation industry.

The most popular new form of tech accommodation professionals are considering adopting are apps for communicating with guests, with 14% of professionals expecting to adopt them in the next five years.

These apps are usually more than just a simple messaging service. Some apps also allow guests to sign up for events and activities happening on the premises, order room service, and in some cases as door keys, although this requires compatible electronic door locks. They can increase guest satisfaction, and help you stand out from the crowd in a competitive market.

The integration of smart technologies in guest rooms, such as automated lighting, climate control, and smart entertainment systems, is another growing trend. It allows guests to customize their environments according to their preferences, enhancing their experience, and increasing the chances of repeat visits and glowing reviews.

Focusing on your digital presence

The importance of a strong digital presence for the future is underlined by the fact that 10% of accommodation businesses are already planning to employ dedicated staff to manage online platforms.

There are plenty of ways to do this, for example by putting your establishment up on third-party booking websites, or by creating paid ads on social media platforms. We suggest investing in social media management software or services since this will help you identify your target audience an cater content to them.

You should also ensure that your establishment has a clean and professional-looking website that is updated regularly. Your website is what most guests will look at before booking a stay with you, even if they’re coming to you from a third-party platform, so it’s your chance to make a good first impression.

There are plenty of great website builders out there that make it easy to create a professional website, and many of them either integrate with or have built-in reservation software. This allows guests to easily go straight from the exploration stage to the purchasing stage.

Most website builders also have an app store that allows you to integrate loyalty program software, so you can more easily offer guest reward programs by tracking interactions and providing personalized incentives, which encourages repeat stays.

Research Methodology

Our methodology was designed to gather insights from the US accommodation industry. We focused on gathering the perspectives of owners and managers who operate various establishments, including hotels, motels, BnBs, campsites, and casino hotels.

Sample size

A total of 417 managers and owners from across the US participated in our survey. They worked at diverse types of establishments and had a varying number of establishments in their management portfolio. This diversity allowed us to conduct a statistically accurate review of the industry.

Data collection

We conducted our survey during 2024. It was preceded by a pilot study aimed at identifying key industry themes before running a larger-scale analysis.

We also commissioned a third-party panel company to ensure we exceeded our target population total and to ensure the validity of our survey results.

Data analysis

We used segmentation analysis techniques to clearly break down businesses by factors including size and revenue. We then used correlation analysis to measure patterns and relationships between different variables.

We then collated data into graphic representations, presented in a format where unlabelled percentages on the Y axis represent the total percentage of responses from all surveyed participants.