Industry leaders serve up tough talk on stalled projects, rising costs, tariff and master plans to keep their teams and balance sheets whole.
NATIONAL REPORT — Stakeholders from all sides of hotel projects gathered at ALIS DESIGN+ Jan. 30-31, 2025, in Los Angeles to get a clearer read on if, when, why and how economic uncertainty might end and what strategies they could use to survive until it does.
Two days of thought leadership guidance, peer-to-peer conversations and cross-disciplinary communication later, most felt cautiously optimistic. Four months on, trade and tariff tensions, stalled project work and wait-and-see interest rates reset their outlook to just “cautious.”
In an industry known for its resilience, caution doesn’t equate with inaction. NEWH Northwest chapter Vice President of Administration Jennifer Haycox, founder and president, Haycox Group, and Education Committee Chair Lisa Anderson, architecture and design representative, United Tile, gave members a jumpstart on their second-half business planning with the virtual webinar, “Behind the Scenes: ALIS DESIGN+ Highlights & Takeaways,” broadcast April 23, 2025.
Sharing their insights on the pressures and potential of the remainder of 2025 and how to successfully navigate two more quarters of uncertainty were:
• Andrea Dawson Sheehan, art director and principal, Dawson Design Associates
• Kenya Jones-Lowell, interior designer, Rice Fergus Miller (RFM)
• Jaime Ausborn Merrill, hospitality design leader, Oculus, Inc.
Mary Scoviak, custom & design content director for The BHN Group by Northstar, which presents all ALIS-branded events including ALIS DESIGN+, moderated the hour-long discussion.
Mid-year metrics: Owners eye reboots; new work slows
Halfway through the year, hotel designers, investors and suppliers still don’t have 20/20 vision through the fog of uncertainty. But they don’t have to look very far to see that the project pipeline has slowed to a trickle.
“I'm still in the cautious boat when it comes to the overall outlook on the economy,” said Jones-Lowell. “I don’t think we are going to see a huge resurgence of projects in the second half. Projects that were calibrated for this economy have shifted [into an active phase]; they are moving forward. As for projects that are already stalled, I don't think we will see some of those projects come back until next year.”
Overall, Jones-Lowell said RFM is still “extremely busy,” but, “The pipeline doesn't extend out as far as we'd like.”
Dawson Sheehan sees a two-part forecast for design firms, depending on their current project list. Those that have work on the books — even a handful of $2-million to $3-million renovations — should be well-enough positioned to ride out an uncertain summer and fall. Those that don’t need deep pockets or a solid Plan B to stay afloat.
“Clients are cautious but are still going ahead with the design,” she said. “They are considering moving forward in purchasing and construction if the economic and tariff outlook improves soon. However, if that improvement comes too late in the summer, they will push ordering until next summer. Still, we have been asked to prep projects for ordering this year, just in case.”
Pipelines are not opening up fast enough to offer much relief. “Release of new projects is turning out to be much slower than anticipated,” Dawson Sheehan added. “We have a handful of light renovations that are progressing through documentation and hope to order by August 1 for a spring completion. Whether that happens is 100% tariff-driven. We also have been hearing chatter about bigger projects, but everyone is waiting to see what happens with the economy and tariffs before they make a move like this.”
That’s going to be a tough wait for some firms, especially those in the Pacific Northwest. “We still haven’t fully recovered from the aftermath of Covid,” she said. “Some architecture and design firms are already sharing project resources to avoid cutting principals.”
Projects, budgets shrink
Jones-Lowell and her colleagues are starting to field questions from clients who plan to allocate CapEx over the next few months. What’s emerging from those conversations is trendline signaling a slight slowdown in pipelines and a change in project size.
“If clients had their eyes on large renovations before, now they may be looking at phased approaches. More RFPs are coming out with language surrounding ROMs [rough order magnitudes] or GMP [guaranteed maximum price] sets,” Jones-Lowell said. Budgets are top of mind, leaving designers to sharpen their pencils in the studio when it comes to costs and schedules.
Long-time clients have put four hotel projects on Dawson Sheehan’s books, but they share her project list with a stream of sub $5 million projects and strategic upgrades for spas, conference spaces and under-performing event areas.
“The all-in CapEx for these types of projects is relatively small. There are people with money who are ready to invest when the wind blows the right direction. These clients can wait until they see what’s happening with tariffs or other factors before they place any orders,” she said.
Big brands’ hard line on PIP deadline compliance has not resulted in windfall project gains as many designers had hoped. Owners still struggling to meet post-Covid debt service are not getting friendly hearings for financing to cover deferred property improvements.
“Some clients are telling us brands’ patience about PIP compliance is running thin,” said Merrill. “So, they may be open to talking to owners about prioritizing what’s absolutely necessary versus what’s ideal or they may be willing to create a phased schedule. But that will be the exception.”
Tariffs continue to complicate the picture
“You can bury a 10% tariff, but you can’t bury a 40% tariff,” said Dawson Sheehan, adding that bigger clients won’t absorb the costs.
The impact didn’t catch the industry by surprise. Jones-Lowell met with clients at ALIS DESIGN+ in January to strategize and see what industry peers had planned. What’s new is that standby coping strategies are off the table. U.S. manufacturers are backlogged but also don’t have the scope to serve as a 1:1 replacement for a global supplier network, as they tend toward a focus on public spaces over guestrooms. Canadian and Mexican suppliers can’t make the numbers work with 25% tariffs.
Waiting it out isn’t an option either. As of late April, giving the tariffs situation 90 days to settle would push most projects to fall 2026 construction, unless they’re in hot climates or are ski resorts.
There may be no simple solution, but Jones-Lowell said that by dialing in on procurement management, there is a way to mitigate the uncertainty, as she distilled from conversations at ALIS DESIGN+. Her advice? Look at the big picture of making sourcing more sustainable, including the “how,” “when” and “where” of procurement. Make sure contingencies are high enough and build time into the schedule. Rethink the sequence of getting projects to completion if needed.
Take client services to the bottom line
All three speakers stressed the importance of using these doldrums to build out client services and support.
“A lot of clients are looking for planning assistance, master plans, renovation plans, concepting... smaller phased design packages that they can then use to secure more or alternative forms of funding,” said Jones-Lowell. “The industry is pivoting and asking our design teams to be a little bit nimbler with project costs and deliverables. Sometimes we can go to a property and see, from data or walking the property that some square footage is not producing the revenue that it needs to or isn’t being used or aligned optimally.”
She advocated taking a consultative role that helps owners find efficiencies — and drive ROI. Properties that evolve over series of renovations may get bogged down with bolted on spaces that drain the P&L. “Maybe the hotel added some F&B in one space, then a trendy restaurant — and suddenly it has five kitchens,” she said. “You don’t need five kitchens in a standard hotel, nor do you need the 60 staff members to work in them. Designers have to see and respond to the clients’ long-term need to be profitable. That’s where the designer can shine.”
Dawson Sheehan recommended prioritizing top line revenue, not bottom-line costs, and suggested focusing on innovative solutions for adding to the room count. Designers need laser focus on RevPAR and operational efficiency, she added. Sometimes, that means finding off-property solutions. Merrill mentioned one ALIS DESIGN+ speaker who used partnerships with local restaurants to avoid F&B costs while grounding the hotel in its community.
Deepening alignment with clients’ long-term goals will keep firms on their radar when uncertainty lifts. “Research what’s going on in your region that affects what clients care about,” said Merrill. “Get to your client as a person and as a business owner. That trust and confidence makes a better collaboration.”
Brighter days are ahead, be it Q4 or 2028
“The silver lining is that there is a lot of work coming,” said Haycox. For design firms who’ve already demonstrated sector-wide resilience through crises from recessions to pandemics, that’s an actionable light at the end of the tunnel. And it’s a bright one. “Firms will be crazy busy in four or five years,” said Dawson Sheehan.
Mary Scoviak is custom and design content director for Hotel Investment Today by Northstar.
Key takeaways from Behind the Scenes: ALIS DESIGN+
• Designers as strategic partners: Designers must bring business acumen to the table — moving beyond aesthetics to become integral collaborators in ROI-driven decision-making.
• Market outlook: Project diversification is critical. While urban and Northwest projects are slow due to economic uncertainty, growth opportunities lie in conversions, mixed-use developments, and casino work.
• Resilience and strategy: Firms should focus on phased master planning, American-made solution, and operational efficiency. Strengthening vendor relationships and embracing regional adaptability were recurring themes.
• Owner expectations: Today’s owners expect design, strategy and storytelling in one. The call: Know your client’s goals, understand their financial drivers and be bold in delivering solutions.
• The power of experience: Culturally rich, community-driven design remains vital. Designers were encouraged to lead with authenticity, creativity, and confidence—even in leaner times.
Source: NEWH Northwest chapter