AI got cheaper, Hilton record openings, 2025 expectations
DeepSeek crushes the stock market, making AI cheaper than it was supposed to be?
TLDR: Too Long Didn’t Read
Mark Hoplamazian of Hyatt was named Cornell’s Icon of the Year 🏆🏨, while Hilton added 154,000 rooms in 2024, with a new Hampton property in Africa 🏨🌍. Air traffic controllers are under scrutiny after a tragic collision ✈️⚠️, and all-inclusive hotels face challenges in Europe due to costs and regulations 🏨💰🇪🇺.
The 2025 trends suggest luxury hotels and AI-driven guest experiences are rising, with a focus on nostalgia 🏨🤖⏳. Meanwhile, tariffs on imports are expected to drive prices up 💸📈, and DOGE is attempting to access the U.S. treasury system, causing disruptions 🪙💼.
A study on psychology of pricing explores consumer perceptions 🧠💲, and research shows that robots may lower perceived service quality unless handled carefully 🤖❌🏨. Additionally, new tools are making it easier to personalize guest experiences and plan expansions 🛠️🏨📈.
0. News snippets
Not important enough to expand on, but worth hearing about
An interview featuring MMI Hospitality's CEO explores the evolution of their brand across decades | New report reveals 9 emerging trends in the event industry | For fans of "The White Lotus": check out Season 3's filming locations | In the US, tips remain taxable—the hospitality association is pushing for tax-free status, following Germany's successful 2002 initiative |
0.5 Follow up
Where we follow up on news from previous weeks
AI Computing Costs Drop Dramatically
Is AI computation becoming more affordable? A new AI model called DeepSeek has revealed computing costs far lower than those of OpenAI and its competitors. This news sent stock prices tumbling for chip and processor manufacturers like NVIDIA. The market now expects software providers, rather than manufacturers, to reap the benefits of this new technology. DeepSeek may have achieved this by reverse engineering knowledge from OpenAI's models (dramatically reducing costs in the process). But hey, what do we humble hoteliers and restaurateurs know about the complexities of AI?
1. Main Hospitality News
Core news related to the industry
Hospitality Icon of the Year!
Hyatt's CEO Mark Hoplamazian, who has led the company since 2006, has been named Cornell's Icon of the Year 2025. You can watch a 38-minute interview with him here. Fun fact: Hyatt has consistently ranked among Forbes' top 100 companies to work for since 2016. Looking to lead your own hospitality venture someday? This might be worth studying!
Hilton Adds 154,000 Rooms in 2024
Hilton has expanded its portfolio by 154,000 rooms in 2024, through both acquiring new brands like "Graduate" and creating fresh ones. They've also just launched their first Hampton property in Africa. For perspective, Marriott, the world's largest hotel chain, added 123,000 rooms in the same period.
Air Traffic Controllers Under Scrutiny
Following a tragic collision between a passenger plane and a helicopter in Washington that killed 67 people, the NTSB (National Transportation Safety Board) is investigating potential understaffing of air traffic controllers. While this might make you consider driving instead, remember that flying remains statistically safer than driving.
All-Inclusive Hotels: Europe's Challenge
All-inclusive hotels are facing more hurdles in Europe compared to regions like the Caribbean, mainly due to costs and regulations. However, Europe isn't lacking in options—Expedia lists 1,331 such resorts in the EU, compared to 432 in all of Latin America. The challenge lies in opening new properties, as the European market appears saturated, making profitable real estate deals harder to find.
2025 Industry Trends
What's on the horizon for hospitality in 2025? Reports indicate luxury hotels and investments are trending upward, while AI is boosting staff productivity. There's a push to make guest experience a measurable revenue source, and nostalgia is driving destination choices. While predictions vary widely, AI remains the common thread throughout.
2. Externalities
Economics, finance, geopolitics. All have an impact on the hospitality sector.
Tariffs = Price Increases
"Tariffs, tariffs, tariffs. WE LOVE tariffs!"—said no one ever. Trump's new tariffs on China, Canada, and Mexico are just the beginning. If you're sourcing materials from beyond your local area, expect higher costs. Even local producers will feel the impact. And heads up—the EU is next. As if the Ukraine war, COVID, and Middle East conflicts weren't enough for your bottom line! 😉
What is DOGE Up To?
DOGE is making waves by attempting to access the U.S. government's treasury payment system—a move that's already led to the Treasury head's resignation. Critics warn that if Musk disrupts the government's crucial payment infrastructure, there could be serious consequences. But hey, the show must go on!
3. Academia
Scientific papers related to the topics above. For those who want to know for sure ;)
Psychology of Pricing
While revenue management is important, psychological factors actually drive purchasing decisions. How do customers perceive value—as cheap or expensive? A recent article in "Hotel Executive" offers valuable insights into pricing psychology, exploring concepts like anchoring effect, framing effect, pricing tiers, and decoy pricing.
Do Robots Signal Lower-Quality Service?
Planning to add robots to your service experience? Be prepared—guests expect to pay less, according to recent research on customer perceptions. The key is implementing cost-saving measures without creating an impression of reduced quality. Perhaps those robots need some snazzy uniforms? 😉
4. Readables
Books, podcasts & the big stuff.
Understanding the Stock Market
Looking to grasp the stock market's wild swings? We've found what might be the best modern explanation in "Adaptive Markets: Financial Evolution at the Speed of Thought" by Andrew W. It weaves together economics, finance, psychology, and evolutionary biology to make sense of market unpredictability.
5. Tips & Tricks Tools & SaaS
Any new software you can use? Industry tricks you missed?
Personalizing the First-Time Guest Experience Online
In classic SaaS blog post style (you know, the kind that ultimately promotes their product), here's a great piece about personalizing guest experiences from their first website visit. The key takeaways? Use Google Analytics to understand your visitors, implement real-time personalization, and customize pricing and offers.
EU Gatekeepers and the DMA's Impact
For EU business operators, the Digital Markets Act is essential reading. It designates tech giants like Google as "gatekeepers" and imposes specific operating rules. This article breaks down the current effects. Ironically, some unintended consequences might actually hurt smaller operators.
Langham's Path to 100 Hotels
A recent interview with Langham's SVP reveals their expansion strategy from 32 to 100 properties. The essentials? Cloud-based PMS, AI-driven pricing, AI-assisted knowledge base, and a loyalty program overhaul. It's basically the must-have toolkit for any major hotel brand looking to compete today.