While this growth is positive, it signals a shift from the rapid recovery phase of recent years to a steadier, more incremental rise. In other words, the playing field is becoming more competitive, and outperforming the market will require a heightened level of strategic agility and creativity.

With a tempered RevPAR growth on the horizon, what can hotels do to ensure they’re not just riding the wave but leading the charge?

Let’s explore with Hospitality Labs the key strategies in commercial planning, revenue management, digital transformation, and the power of AI that can help hoteliers stay ahead in 2025.

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1. The Foundation of Success: Strategic Commercial Planning 

In a landscape of limited growth, every decision matters. This is why commercial planning, which encompasses sales, marketing, and distribution, becomes more crucial than ever. Hotels need a comprehensive strategy that not only targets demand but also maximizes profitability across all segments.

· Segmentation & Personalization: To capture high-value customers, hotels must sharpen their focus on segmentation. It’s no longer sufficient to target broadly defined customer categories. Instead, a refined approach is needed—one that breaks down guests into smaller, actionable segments based on their needs, booking behaviors, and preferences. Personalized offers that speak directly to these groups can make a significant difference in capturing and converting demand.

· Distribution Channel Optimization: In a competitive market, the right mix of distribution channels can be a powerful driver of profitability. Hotels should analyze the ROI of each channel and make adjustments to find the right balance.  The goal is to foster a balanced distribution strategy that includes direct bookings, third-party platforms, corporate contracts, and digital marketing, to ensure that every dollar spent translates into maximized revenue and EBITDA.

· Sales Excellence: The sales team’s role has become increasingly sophisticated. To truly stand out, hotels must equip their teams with the right tools and data insights to target high-potential accounts and tailor their approach. With a clear commercial roadmap in place, sales teams can prioritize the right clients, negotiate effectively, and close deals that align with the property’s revenue objectives. 

2. The Revenue Management Evolution: Beyond Room Rates

Revenue management is no longer confined to adjusting room rates; it’s an expansive discipline that now includes optimizing total revenue from all revenue streams within a property. 

• Total Revenue Management (TRevPAR): Instead of focusing solely on RevPAR, leading hotels are now shifting towards TRevPAR (Total Revenue per Available Room). This approach considers all revenue sources—food and beverage, spa, ancillary services, and beyond—ensuring that every facet of the guest experience is monetized effectively. Revenue managers need to adopt a holistic perspective, where decisions for room rates, upselling, cross-selling, and bundling packages are interconnected and mutually reinforcing.

• Dynamic and Predictive Pricing: The days of seasonal pricing alone are over. To outperform the market, hotels need to implement dynamic pricing models powered by machine learning algorithms that react to real-time market demand, competitor rates, and even weather forecasts. Predictive pricing enables hotels to optimize room rates not just based on historical trends but on anticipated shifts, ensuring that rates are always competitive yet profitable.

• Profit Optimization: Revenue managers should also prioritize profit over mere revenue by factoring in the cost of distribution. By analyzing which channels bring in the most profitable business (rather than just the most bookings), hotels can improve their bottom line. This means calculating the net revenue from each booking after deducting distribution costs, acquisition costs, and commission fees to see which sources contribute to the hotel’s profitability.

3. Focus on Other Revenues: Unlocking F&B Potential and Ancillary Services

As room rates stabilize, the focus on ancillary and F&B revenue has become a strategic priority for hoteliers looking to boost overall revenue. Hotels can no longer rely on room revenue alone,  optimizing every possible source of income has become essential.

• Food & Beverage Optimization: With the right tools, revenue management principles can be applied to F&B, allowing hotels to dynamically adjust prices, create tailored packages, and manage inventory based on demand patterns. Tools that provide insights into customer preferences and spending habits can help in curating special offers, such as prix-fixe menus, exclusive dining experiences, or upsells that cater to specific guest segments. A well-thought-out F&B strategy can significantly impact TRevPAR, driving incremental revenue beyond traditional room sales.

• Smart Menus and AI-Driven Pricing: AI can assist in predicting demand for various menu items, allowing for the adjustment of prices or menu offerings based on factors like seasonality, day of the week, or event calendars. For example, during a major local event, the hotel might raise the prices on high-demand items or create exclusive event-themed menu options. Using AI, hotels can develop a “smart menu” that automatically optimizes pricing in real-time, maximizing profit on F&B items without alienating customers.

• Revenue from Ancillary Services: In addition to F&B, there are other valuable revenue streams that can be optimized. From spa services and event spaces to transportation and concierge offerings, hotels have a wealth of options to generate additional revenue. Developing targeted strategies for these services, such as bundling spa treatments with room bookings or offering exclusive transportation options, can help in driving ancillary revenue. Upselling opportunities during the guest journey—such as offering late check-out or room upgrades—can also enhance overall spend.

• Data-Driven Guest Personalization: Leveraging guest data to create tailored experiences has a profound impact on ancillary revenue. By analyzing guest behavior and preferences, hotels can identify which services are most appealing to each segment and promote these offerings proactively. For example, a business traveler may value a quick room service breakfast, while a family might appreciate discounted tickets to nearby attractions. Personalization ensures that ancillary offers are relevant, increasing both guest satisfaction and conversion rates.

4. Digital Transformation: Building Agility and Reach 

As customer expectations evolve, so must our digital strategy. 

Technology is no longer an add-on but a core element of commercial success. Here’s how digital transformation can drive growth even in a flat market

• Enhanced Customer Journey Mapping: With more touchpoints than ever before, understanding and optimizing the customer journey is essential. By mapping out the entire journey from pre-booking research to post-stay engagement, hotels can pinpoint areas where digital tools like personalized landing pages, tailored email campaigns, and digital concierge services can improve conversion and guest satisfaction.

• Omnichannel Marketing: Today’s guests are everywhere—on social media, browsing on mobile, and researching on desktops. Hotels that implement omnichannel strategies, seamlessly connecting with guests across multiple platforms, can ensure that their brand remains top of mind. Through consistent messaging and retargeting, hotels can nurture leads and build stronger relationships, increasing the likelihood of a booking.

• Automated Workflows: The use of CRM tools and marketing automation platforms allows hotels to stay relevant with minimal effort. From sending personalized welcome emails to loyal guests to automating promotional campaigns based on seasonality, automation reduces the manual workload and keeps customer engagement high.

5. Artificial Intelligence: The Catalyst for Commercial Efficiency

In the quest to do more with less, AI offers the key to unlocking efficiency, speed, and precision in the commercial process. 

Far from replacing human roles, AI empowers teams by handling repetitive tasks, crunching large data sets, and providing actionable insights that enhance decision-making.

• Augmenting Human Intelligence: AI’s potential lies not in replacing human intuition but in enhancing it. With AI, revenue managers can access deep data insights, enabling them to make more accurate pricing decisions. Sales teams, on the other hand, can leverage AI to streamline their prospecting efforts, allowing them to prioritize accounts with the highest potential.

• Accelerating Sales Cycles: By automating lead scoring, follow-up sequences, and even preliminary conversations through AI-driven chatbots, hotels can significantly reduce the time it takes to convert leads. Sales teams can focus their energy on high-value tasks like relationship building and complex negotiations, leaving the repetitive processes to the machine.

• Automating Routine Tasks: AI-powered tools can take over the labor-intensive aspects of revenue management, such as data entry, report generation, and forecasting. This frees up time for revenue managers to focus on strategic initiatives, enhancing both productivity and job satisfaction.

Final Thoughts: Preparing for 2025 and Beyond

The future of hospitality is undoubtedly shaped by an evolving landscape of challenges and opportunities. As we face a modest RevPAR growth projection for 2025, it’s clear that staying ahead requires more than just optimism. It demands a proactive, multifaceted approach that integrates commercial strategy, revenue management, digital transformation, and AI-driven innovation.

 By embracing these strategies, hotels can not only keep pace with market growth but also position themselves as leaders in an increasingly competitive environment. The key to outpacing industry averages lies in our ability to adapt quickly, make data-informed decisions, and continually enhance the guest experience.

The question is no longer whether we should embrace these changes, but rather, how swiftly we can implement them. In a year marked by incremental growth, every strategy, every tactic, and every technological investment will be critical in achieving and sustaining competitive advantage.

 Let’s get ready for 2025 with a renewed focus on smart, data-driven strategies and a commitment to leveraging technology in a way that amplifies—not replaces—the human touch that defines hospitality.

Until next time, keep exploring the endless possibilities of hospitality.

Stay ahead in the hospitality game. Subscribe to my newsletter at Hospitality Labs for early access to extended and unique content.

Fernando Vives

About Fernando Vives

Fernando Vives stands at the forefront of hospitality expertise, guiding Minor Hotels Europe and Americas (part of Minor Hotels ) Commercial Discipline and Top Line Results. His dynamic leadership oversees a vast portfolio, including sales, revenue management and digital growth, steering a team of over 2,000 across 30 countries and managing a turnover of over $3 billion USD. Awarded as one of the Top 20 Extraordinary Minds by HSMAI in the industry for Commercial & Revenue Optimization Leadership, Fernando's extensive background includes senior roles at renowned hotel chains and ventures into entrepreneurship. He is an academic pioneer, and an esteemed speaker and a passionate industry advocate, Fernando's educational prowess is matched by his commitment to shaping the future of hospitality as an Ambassador for Hospitality Labs 

The views and opinions expressed in this newsletter are solely those of Fernando Vives and do not necessarily reflect those of any company or organization he works for or is affiliated with, nor those of their partners or suppliers. The data sources used are mostly public, ChatGPT may have been used for research assistance, copywriting or editing. If you find any discrepancies or errors in the data or insights shared, please reach out via LinkedIn for necessary adjustments. Thank you for following and being a part of this community.