Independent hotels worldwide are navigating a complex market in 2025, as rising costs, shifting traveller behaviour, and labour shortages continue to challenge the sector.
Data from Cloudbeds’ latest annual report, covering more than 20,000 properties across 150 countries, highlights key trends in occupancy, booking patterns, and revenue strategies that are shaping the independent hotel industry this year.
Stabilising occupancy and evolving booking patterns
After the surge in travel demand following the pandemic, global hotel occupancy has begun to normalise.
Cloudbeds’ data shows that while overall demand remains moderate, regional variations are significant. Factors such as inflation, business travel recovery, Chinese outbound tourism, geopolitical tensions, and currency fluctuations are influencing bookings.
Short-term booking behaviour has also shifted. Reservations tend to accelerate in the 30 to 10 days before arrival, with a final peak in the last 10 days. Hotels can leverage this pattern to adjust pricing dynamically and target marketing efforts strategically.
Online travel agencies (OTAs) continue to dominate reservation channels for independent properties, capturing 61% of bookings in 2024, compared with 35% for branded hotels.
While OTAs provide visibility, over-reliance can reduce profitability, highlighting the need for a balanced distribution strategy that includes direct booking incentives.
Revenue management under pressure
Average daily rates (ADR) for independent hotels fell by 1% in 2024, reflecting both weaker demand and growing price sensitivity among travellers.
Despite projected global inflation easing to 3.3% in 2025, room rate growth is expected to lag at just 2.6%, posing ongoing revenue challenges.
The report emphasises a shift from traditional room-focused revenue management to total revenue optimisation. Hotels are increasingly aligning sales, marketing, and revenue departments to maximise profitability across all services, including food and beverage, events, and ancillary offerings.
Artificial intelligence (AI) tools are playing a growing role, helping hotels forecast demand, personalise offers, and optimise pricing in real time.
Workforce challenges and operational adaptation
Labour shortages remain a critical concern for the independent hotel sector. High staff turnover, long working hours, and increased employee expectations are driving costs and operational strain.
In the United States, hotel turnover rates reached 73% in 2024, with managers also experiencing significant pressure.
Independent hotels can adapt by focusing on staff training, career development, and workplace satisfaction. Technology solutions, particularly property management systems (PMS) enhanced by AI, can streamline operations, reduce staff workload, and support retention.
Cloudbeds’ report also highlights emerging trends shaping the sector, including AI-driven guest engagement, influencer-led travel marketing, and heightened price sensitivity among travellers.
Hotels that adapt to these dynamics, optimise revenue across multiple channels, and invest in workforce stability are better positioned to sustain growth despite the ongoing market pressures.
