The Priority for Hotels in 2025 Is Total Profitability
Like every other calendar year before it, entering 2025 presents a series of challenges and opportunities for every hotel organization. Labor issues persist, the need for integrated technology continues to become pivotal for operations and guest demands are evolving for every amenity or brand feature.
Our thesis is that 2025 will finally realize a full recovery from the pandemic where travel volume, RevPAR and other aggregate statistics will meet or surpass 2019 levels across all key segments. But therein, the question is: how will demand continue to grow? There are already signs of cyclical stagnation and flatlining occupancy that should worry hoteliers in terms of meeting ownership growth targets.
While the two of us cannot speak to all hotels across all categories, with our specialization being luxury and upscale properties, the solution is to focus on total revenues and total profitability where the word ‘total’ denotes a holistic, synergistic commercialization of rooms and all ancillaries (dining, spa, golf, gift shop, activities, gift cards, miscellaneous and so on).
In layman’s terms, with new guests harder to find and an inability to sizably increase year-over-year occupancy rates, the goal is to get more juice from the squeeze from each guest that books with you.
This can come from boosting ancillary spend, raising ADR as justified by superior on-prem facilities or features, encouraging longer LOS, getting more frequent return visits or all of the above. Then, from a profitability perspective, hotels must simultaneously investigate actions like inducing channel shift to lower CAC (increasing the net revenue margin), centralizing data to scale personalized service or even deploying one of the numerous wellness technologies that’s emerged to augment a guest’s stay through labor-light health-conscious amenities.
These are but a few of the issues that we discuss in our latest book that’s just been released, “Total Hotel Mogel: Essays on Hotel Profitability
(2024) which is available at Amazon in print and eBook. The focus throughout is in giving you the tools and insights you need to help your hotel organization continue to prosper no matter what 2025 brings. We thank you in advance for your support and hope that you find our writing meaningful for your hospitality career development.
As well, by ‘latest book’, this is in fact the eighth book that the two of us have published together over the past 12 years. In the picture here are two of the previous Hotel Mogel-branded books, More Hotel Mogel
(2020) and The Hotel Mogel
(2018) that touches on similar topics in hotel management. Also check out our seventh book devoted to ramping up wine revenues, In Vino Veritas: A Guide for Hoteliers and Restaurateurs to Sell More Wine
(2022).
About Hotel Mogel Consulting Limited
Hotel Mogel Consulting Limited works exclusively with investors/owners/operators to help solve critical investment, management and marketing issues in the luxury segment. We also undertake public speaking at corporate and association events, where an independent point of view is desired.
