US Accommodation and Food Services Sector NAICS 72

Oct 13, 2025 - Hoteliers Pulling Back

• A majority of hotel operators are scaling back development plans amid rising costs and softening consumer demand, a new survey conducted by the American Hotel & Lodging Association (AHLA) finds. The survey, conducted in late August, gathered input from nearly 400 hotel property owners and operators nationwide. It found that development and renovation plans remain under pressure, with 32% of respondents delaying projects, 24% scaling back, and 8% canceling projects entirely. Only 8% of property owners/operators reported moving ahead with new investments. Also, nearly half of the respondents (49%) reported being understaffed, underscoring ongoing workforce challenges that add to financial uncertainty. Those polled reported that leisure travel continues to soften, with 30% of hotels seeing declines in completed leisure stays and 26% reporting drops in bookings compared to the same period last year. Business, group, and government travel also showed softness, with 15–17% of properties reporting decreases.
• Younger consumers are cutting back on spending, with restaurants among the first to feel the impact, two new studies show. According to the semi-annual Taking Stock with Teens survey, teens’ annual spending has declined by 6% year-over-year and is 1% below the average spending levels from the past 10 years. Also, research from investment bank TD Cowen finds that consumers ages 18-34 are under more pressure than the average consumer. The pullback among younger consumers, who make up about 40% of all restaurant guests, has major implications for the industry, especially the fast-casual segment, which relies heavily on younger guests. Restaurants are attempting to “future proof” their positioning by rebranding or launching youth-focused loyalty, digital, or campus initiatives to maintain engagement with younger audiences. Operators may need to rethink marketing, menu pricing/value tiers, loyalty incentives, and targeting to shore up revenue during lean times.

• Artificial Intelligence is transforming hospitality, with AI-powered robots supporting services, smart technologies enhancing operational efficiency, and predictive analytics forecasting demand, according to Hospitality Net. But while AI’s technological capabilities continue to expand, ultimately its success will depend on how it’s perceived and experienced by guests and employees, HN warns. Indeed, barriers to AI adoption in hospitality are less about trust in its technical capability and more about psychology, with people judging AI not only on what it does, but also on how it makes them feel. Understanding the psychological responses of guests and employees is important as they affect people’s willingness to accept and engage with the technology, according to HN. To deploy AI successfully, hospitality leaders should “humanize” the AI interface by mixing AI and human touchpoints to counteract its perceived lack of empathy and ensure it empowers rather than controls interactions, per HN.
• Accommodation & Food Services was one of four of the 16 industries tracked by the Institute for Supply Management’s Services Purchasing Managers’ Index (PMI) that reported contraction in August due to a decline in business activity and the impact of tariffs. Producer prices for accommodations fell nearly 1% in August compared to a year ago after rising 2% in the previous August-versus-August annual comparison, according to the latest US Bureau of Labor Statistics data. Employment by accommodation and food services grew 0.9% year over year in August, down slightly from its high in June, while sector wages increased 3.4% YoY in July to $19.54 per hour, BLS data show. Rising payrolls are a pain point for the sector, which must contend with rising minimum wages in many US states and competition for workers.