Deloitte published its Future of Hospitality report after spending two years on the research, engaging more than 1,000 industry professionals, leaders, and insiders. The scope covers the full hospitality sector: hotels, vacation rentals, cruises, and online travel agencies.
The report breaks into two parts. First, five problems the industry is dealing with right now. Then, six things Deloitte thinks hospitality companies should do about them.
The Five Problems
Guests are changing fast. The report points to 18.1 million Americans (about 11% of the workforce) who identified as digital nomads in 2024. That's a 147% increase since 2019, and these travelers want different things than traditional guests. At the same time, rising costs are making everyone more price-sensitive. Deloitte cites growing demand for later bookings, shorter trips, discounts, and flexible loyalty rewards.
Finding guests is harder. Travelers now discover trips through social media reels, AI trip planners, and influencer content. Traditional marketing channels are losing ground, and Deloitte says conventional acquisition models "may struggle to keep up" as digital behavior shifts.
Money is tight. Hotel construction in the US hit a five-year low in mid-2025. Interest rates are squeezing new builds and renovations. Construction costs are jumping at a 6% annualized rate, and tariffs and supply chain issues are pushing material costs higher.
Communities are pushing back. The report uses Barcelona residents spraying tourists with water guns as its opening example. Housing prices, overcrowded infrastructure, and environmental damage from mass tourism are forcing local governments to act. Spain blocked more than 65,000 Airbnb listings. Insurance premiums are climbing. Rental bans and new taxes are spreading.
Staffing is still broken. Hospitality employment sits at roughly 88% of 2019 levels, yet payroll costs are at record highs. In Los Angeles, a $30 minimum hourly wage for hospitality workers is driving talk of hotel operators closing restaurants or switching to self-service food. In response, 81% of hoteliers say they're prioritizing employee productivity and 49% list AI-powered solutions as a top tech initiative.
What Deloitte Recommends
The report lays out six imperatives: diversify your offerings, use AI across the guest experience, expand into new markets, build predictive operations, operate responsibly, and invest in workforce development.
A few specifics stand out. Deloitte recommends building tailored offerings for niche guest segments like solo Gen Z travelers, pet owners, and aging travelers. It suggests flexible pricing tiers and subscription-style payment options. On the AI side, the report highlights smart itinerary builders, real-time add-on suggestions based on stay patterns, and AI-powered translation for international guests. It also calls for transparent, all-in pricing that eliminates hidden fees.
What This Means for Short-Term Rentals
Vacation rentals come up throughout the report, mostly as a competitive force that traditional hospitality providers need to account for. Deloitte notes that STRs' flexibility and local feel "often force hospitality providers to stay on their toes to reevaluate and optimize their value proposition."
But the pressures Deloitte describes aren't one-sided. The tourism backlash, tighter regulations, shifting traveler expectations, and staffing challenges apply to STR operators just as much as they do to hotel chains. The report's recommendations around niche targeting, AI tools, and transparent pricing are already familiar in the vacation rental space.
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