Future of Hotel Design & Construction 2025: Leaders Share Insights

Construction costs have nearly doubled, interest rates remain high, and labor challenges persist. Yet, with airports packed and group business returning, hotel development teams are finding paths forward. “I see all challenging environments as an opportunity yet to be gained,” shared No Vacancy News podcast host Glenn Haussman, kicking off HotelSpaces' opening discussion on the future of hotel development, design, & construction, where industry leaders shared how they're seizing opportunities in challenging and expensive times.

The discussion moderated by Haussman included Fred Brandstrader, VP of Construction & Capital Expenditures at Hyatt; Jason Cruce, SVP and Head of Hotel Development at Starwood Capital; and Aimee Fyke, COO of Tharaldson Hospitality. 

Market Reality & Strategic Growth 

Despite today's soaring costs and challenging market conditions, Tharaldson Hospitality has grown from 18 to 87 properties since 2011 through strategic market selection. "The reality is in California, despite challenges, we can drive higher rates," explained Fyke. Their strategy? "When we do our land acquisition, we find a good market and see what other brands are there."

Travel demand remains robust. "Every airport I'm in is busy, no matter what day of the week," noted Brandstrader. Even perceived threats have evolved into opportunities. "Airbnb is not a distractor anymore; they're a given," shared Cruce. "They're a platform we chase rate with sometimes."

Brand Strategy & Market Evolution 

While market selection drives success, strategic brand partnerships offer another path forward. "I love dual-branded hotels. If we're talking about the future of hotel development, design, and construction... these are winners, particularly in the select service environment," noted Haussman. The numbers prove his point - Tharaldson has maximized efficiency through shared infrastructure. "The margins are much better where we can take those efficiencies," explained Fyke, highlighting properties that achieve this on just three acres - "which is almost unheard of."

Extended stay properties exemplify this market evolution. "The extended stay market for sure is what's growing up," noted Brandstrader. "From the Hyatt perspective, Hyatt Studios is a brand addition that will help Hyatt expand into that sector, while complementing our Hyatt Place and Hyatt House brands."

Sustainability Driving Business 

Beyond operational efficiencies, environmental initiatives have emerged as a key business driver. "When you're thinking about sustainability, it doesn't just have to be what you build, but it could be ways that you operate the hotel," observed Haussman.

At Starwood Capital, this philosophy shapes every development decision. "If it doesn't come from the earth, it doesn't go into the building," explained Cruce. Their 1 Hotel Hanalei Bay property demonstrates this commitment - from reclaimed Indonesian teak furniture to resilient infrastructure that supported the community during recent storms.

Hyatt is seeing sustainability drive group bookings. Brandstrader detailed how their environmental initiatives in renovations and operations have become key selling points for meeting planners.

Technology Transforming Development 

Smart systems aren't just about efficiency anymore - they're changing how projects get built and managed. Construction teams use construction cameras equipped with artificial intelligence to reduce site visits and maintain detailed project records. "I can literally go through every day of the development sequence," explained Cruce, highlighting how this documentation has proven invaluable in construction claims.

Meanwhile, remote monitoring allows project leaders to track building performance across entire portfolios, cutting costs and carbon footprints simultaneously.

Beyond The Building 

The discussion extended well beyond these core topics. From Caribbean all-inclusive resorts to four-story modular builds, from acquisition strategies to labor solutions, each panelist shared unique perspectives on industry evolution and their approaches to handling today's challenges - from Tharaldson's focus on high-barrier markets to Starwood's emphasis on sustainability and Hyatt's diverse portfolio strategy - this discussion offered just a glimpse into their extensive insights on navigating today's development landscape.

You can watch the full discussion here...