What’s ahead for finance, M&A, development, management

With a new presidential administration, there is optimism that loosening government regulations could help banks increase their hospitality lending. They also tell us the market is close to a “normalized rate environment,” and they don’t expect much change in the next few years.

New development in 2025 will continue to face challenges, with higher interest rates continuing to mute growth. Despite that, experts say new construction is starting to pick up.

On the management side, labor costs and retention remain major challenges. Deal activity should aid third-party management growth, and experts believe that industry consolidation will continue.

Here’s a recap of our 11 stories:

Finance and deals

• Why experts are optimistic about the 2025 refi market: Hotel refinance experts expect an uptick in hotel refinances in 2025 and are hearing optimism from their clients about what the new year can bring in terms of financing. 
• Will market optimism lead to more M&A in 2025? Deal and finance experts said 2024 was a slow year for acquisition financing, but many are optimistic that more capital will be ready to deploy this year and bring buyers and sellers back to the market.
• How the role of banks is changing hospitality lending: Hotel finance experts say even a partial reentry from regional or institutional banks has helped compress credit spreads in the hospitality lending space.
• Can Trump deregulation be an elixir for hotel lending? Hotel finance experts discuss market optimism that loosening government regulations can help banks increase their hospitality lending. But the reality could be far more complicated.
• Is this the new normal for hotel finance? Hotel finance experts tell us we are close to a “normalized rate environment,” and they don’t expect much change in the next few years.

Development

• 2025 development headwinds, tailwinds: New development remains challenging, but creative financing and unique perspectives provide opportunities.
• Rates will continue to mute new development: Deals that are getting done are built on relationships and track records; stabilizing construction costs aid mid-market, extended-stay developments.
• New construction starting to pick up: While supply growth is expected to range only between 1% and 2%, some developers are just now starting to see more shovels in the ground.

Management

• Management challenges and changes for 2025: Addressing labor costs, retention, and F&B profitability is top of mind for managers creating more incentive-based deals.
• Consensus: Management consolidation will continue: For better or worse, mid-sized and regional management companies are expected to grow via acquisition to better compete at scale and pick up new geographies.
• Deal activity to aid 2025 management growth: Increase deal flow should create new opportunities for third-party managers with some looking to Europe where potential is ripening.