When the Wave Turns: How Hotels Navigate Economic Downturns (and What Comes Next)

Hotels face more pressure during an economic downturn than almost any other segment. Demand tightens, booking windows shrink, and consumer behavior becomes unpredictable. This article outlines the hard data shaping the current slowdown, what it means for hotel performance, and how properties can protect revenue through segmentation, data hygiene, and targeted automation.

UPDATE 08/18/2025: RevPAR is down in 42% of U.S. markets in the week of August 3-9, 2025. RevPAR went down by 1.6% because of falling occupancy and ADR. Read full report at the following link. - STR

When the U.S. economy softens, the hospitality industry often feels the impact first. The 17th Annual Hotel Data Conference revealed that 2025 has begun with a host of pressures pushing hotel performance into tougher territory:

• Demand, ADR (average daily rate), and RevPAR (revenue per available room) forecasts were downgraded - demand by -0.6 percentage points, ADR by -0.5, and RevPAR by -1.1 - indicating a pervasive weakening in consumer behavior. hoteldataconference.com

• Occupancy is projected to slip from 63% in 2024 to around 62.5% in 2025, with only the luxury and upper-upscale segments showing growth amid tightening conditions. Hotel Management

  
  

Beyond industry-wide metrics, broader indicators point to challenges outside hotel walls too: passenger traffic through U.S. airports has declined compared to last year, and hotel and airline prices fell between April and May; both signals that consumers are pulling back on travel. businesstravelnews.com

Together, these figures frame a market that’s cautious, competitive, and demanding sharper strategy, not simply cost-cutting. Your property is going to need expertise, not just a software program, to navigate a downturn and come out unscathed. 

HMA has over 50 combined years of email marketing, CDP and omnichannel marketing consulting experience. A tool, or software is worthless if you don’t know how to use it properly, and if you are still blasting to ALL of your contacts, you will destroy your marketing database and have to start over. Not a place you want to be if the industry struggles.

You must have smart strategies and narratives that resonate with the end user, and a single narrative is not going to resonate with all of your guests. That is why you need to micro-target. It’s a form of personalization. Different narratives or stories that resonate with different demographics or lifestyle interests. Do you need to do 50 different emails? No. You just need to use dynamic content if you want to send one email, or send 3-4 different emails to see how each segment does individually. Here are a few, basic things to think about in an economic downturn:

Smart Strategies for Downturn Resilience

1. Lean into Your Most Loyal and Profitable Segments

In an economic downturn, broad messaging wastes spend. Using Intelligencia’s segmentation tools, hotels can market to guests most likely to respond, with messaging tailored to frequency, behavior, and spend patterns. Precision matters more when budgets tighten.

2. Clean Data Keeps Campaigns Efficient

Uncertainty magnifies the cost of waste. Outdated or incorrect contacts drain campaigns and distort performance. Intelligencia’s data hygiene tools remove OTA placeholders, suppress invalid contacts, and keep marketing lists lean and responsive.

3. Capture the “Almost Guests”

Browsing doesn’t equal booking - especially in a downturn - but automated booking-recovery journeys convert hesitation into revenue. Thoughtful reminders timed to browsing or cart abandonment help properties influence guest decisions without manual effort.

4. Personalization Matters More Than Ever

When consumers pull back, they also become selective. Relevance drives conversion. Personalized offers - wellness weekends, seasonal experiences, family packages - outperform generic campaigns by a wide margin. Intelligencia enables lifestyle- and preference-based personalization rooted in verified guest data.

5. Monitor Metrics, Move Fast

Market conditions can shift quickly during an economic downturn. Real-time dashboards make it easier to correct course, adjust targeting, and pivot campaigns before performance drifts too far off track.

Why This Matters Today - and Tomorrow

A soft economy doesn’t have to signal retreat. With occupancy and RevPAR weakening, every marketing dollar must earn its keep. But the good news? By focusing on the right guests, keeping data clean, recovering lost bookings, personalizing intelligently, and reacting instantly, hotels can hold the line and prepare for the eventual rebound.

When market conditions turn again (and they will), properties that navigated the downturn with precision will be first in line to accelerate growth. To learn more about how HMA can help your property through uncertainty, send an email to hello@wearehma.com.