Global travel demand is expected to remain robust in 2025, but analysts warn that consumer focus on value for money could influence hotel investment returns.
While leisure travel continues to grow, price sensitivity and cautious spending are emerging as key factors for investors to consider.
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Leisure travel drives hotel demand
Data from Tourism Economics in the third quarter of 2024 shows that 67% of respondents continue to prioritise leisure trips. The findings indicate that the desire to travel remains strong worldwide.
At the same time, 26% of travellers said they intend to limit spending during leisure trips, highlighting a shift towards cost-conscious choices that could affect hotel revenue and investment performance.
Economic uncertainty shapes investor outlook
Although inflationary pressures have eased, weaker global growth forecasts and ongoing geopolitical tensions are affecting consumer confidence. Investors in the hotel sector are assessing how these factors may impact occupancy rates and average daily rates.
Properties that fail to align pricing with guest expectations may face pressure on returns, even amid sustained demand.
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By GlobalDataHotels respond to shifting consumer priorities
The hotel industry continues to expand, supported by the long-term growth of the middle class in emerging markets and strong leisure travel trends.
However, investors must navigate a market where travellers increasingly seek value for money.
Hotels that balance competitive pricing with quality service may offer more stable investment prospects in 2025, while those that do not risk lower occupancy and reduced profitability.
