Inauguration 2025: What a hotelier U.S. President could mean for the industry.

The American hotel industry has seen its share of ups and downs over the past decade. As we look ahead to 2025 and welcome in a new President, it's worth examining how past policies shaped the sector and what things we might expect in a new term.

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A look back at Trump’s first term.

From 2016 to 2019, we saw occupancy rates climb from 65.9% to 68.1% - a significant jump in an industry where single percentage points can mean millions in revenue. Even more impressive was the rise in Average Daily Rates (ADR) from $124 to $131. 

What drove this growth? The Tax Cuts and Jobs Act of 2017 played a major role. By slashing corporate tax rates from 35% to 21%, hotels suddenly had more capital to play with. This meant more renovations, expansions, and importantly, more jobs. But it wasn't just tax policy making waves - lower oil prices helped too. When travel costs drop, more people hit the road, and that means more heads in beds.

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What's on the horizon for term two?

As we look ahead to the next four years, several factors could reshape the industry landscape. Assuming a similar second Trump term, and follow-through on certain policy proposals, we could expect:

1. Further tax incentives: Similar to the Tax Cuts and Jobs Act, Trump has promised to slash corporate tax rates which could mean more capital for properties and management groups. 
2. Changing trade policies: Any shifts in trade policies could impact the cost of the furniture in your lobby to the linens in your rooms. Trump has proposed a 60% and 25% tariff on imports from China and Mexico, respectively. 
3. Tax-less tips: Trump has proposed eliminating income taxes on cash tips. If implemented, this could be a game-changer for attracting and retaining talent in the hospitality industry that's historically struggled with staffing issues.
4. Lower energy costs: If the administration revisits policies that lower energy costs, domestic and international travel could increase, leading to higher occupancy rates.

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Beyond inauguration day.

As we navigate through 2025, the hotel industry sits at an interesting crossroads. While historical data shows us that the right policy mix can drive significant growth, success in today's market requires adapting to new challenges. For hotel operators, staying informed about these policy changes and how they affect the greater hospitality industry is key to success.

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