Hotel growth strategies shift toward differentiation over expansion

Flat demand, rising costs and brand saturation push hotels to compete through experience, loyalty and positioning rather than scale alone

Hotel executives outlined varied growth strategies amid a challenging performance outlook characterized by flat revenue trends and rising costs. Leaders emphasized that growth will depend less on overall market expansion and more on gaining market share, strengthening customer relationships and positioning brands carefully. Independent hotels, emerging markets and experiential luxury segments were highlighted as areas of opportunity. At the same time, increasing brand proliferation and evolving guest expectations are reshaping how hotel companies approach expansion and differentiation.

Key takeaways

• Growth requires active strategy: Hotel expansion is increasingly driven by market share gains, operational efficiency and loyalty rather than overall market growth.
• Organic growth remains central: Companies such as PM Hotel Group prioritize maximizing performance within existing portfolios while selectively pursuing acquisitions.
• Brand positioning matters more: Companies like Starwood are focusing on selective brand development, repositioning older properties and maintaining smaller, more curated portfolios.
• Independent hotels remain resilient: Independent brands continue expanding globally, especially in emerging markets where new middle-class travel demand is rising.
• Franchising and partnerships expand reach: Sonesta highlights franchising, partnerships and CRM investment as key drivers of growth and customer retention.
• Emerging markets offer opportunity: Regions such as Japan, Brazil, India and Indonesia are seen as growth markets with increasing international travel demand.
• Experiential luxury is becoming essential: High-end travelers increasingly expect personalized, curated experiences rather than standardized luxury offerings.
• Brand saturation creates pressure: The growing number of hotel brands intensifies competition and raises the importance of differentiation and guest understanding.

Get the full story at CoStar

Enjoying this analysis? Hospitality.today delivers daily insights on hotel distribution, AI trends, and travel commerce — straight to your inbox. Subscribe for free at Hospitality.today →