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

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 Guests

When overall demand softens, identifying and prioritizing your most reliable segments becomes priceless. These may include frequent stayers, high spenders, or direct-booking audiences.

Using a platform like HMA’s Intelligencia, you can segment based on real behaviors - frequency, spend patterns, booking channel, and tailor messaging accordingly. This directs marketing toward the guests most likely to respond, trimming waste and elevating impact.

2. Clean Data Keeps Campaigns Efficient

Economic uncertainty heightens the stakes of every marketing dollar. Sending campaigns to outdated or incorrect contacts? That’s budget gone astray, and with occupancy under pressure, you can’t afford it.

Intelligencia’s integrated data hygiene features - including suppression of OTA-based or unverified contacts - help ensure your outreach goes only to engaged, genuine guests.

3. Capture the “Almost Guests”

Forecasts suggest the road ahead will be rocky - and not every browsing session ends in a booking. Automated, personalized booking recovery journeys can tip the balance.

With built-in, thoughtfully timed reminders - whether someone abandoned a booking halfway or lingered on a confirmation page - you can quietly re-engage and guide them back without adding manual work for your team.

4. Personalization Matters More Than Ever

As passengers become more selective, broad messaging loses effectiveness. Instead, tailor experiences to what resonates - a spa weekend for wellness seekers, culinary-themed packages for food lovers, or family-friendly deals for repeat families.

Intelligencia enriches profiles with lifestyle and preference data, helping you speak in ways that feel custom - not just data found in the PMS.

5. Monitor Metrics, Move Fast

When forecasts suggest continued stress - especially through the second half of 2025 - waiting weeks to assess campaign performance isn’t an option. You need real-time insight.

A dashboard toolkit, like the one in Intelligencia, arms you with immediate visibility - so you can pivot quickly, shifting focus to campaigns, segments, or channels that actually drive results.

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.