Michael’s predictions and insights for the hospitality industry in 2025

From AI to inflation, the future of hospitality in the New Year

In 2024, Michael Dominguez, CEO of United Luxury Hotels International (ALHI), told the Smart Meetings community that the hospital industry is entering a new normal phase after the epidemic. Artificial intelligence is also a new shiny tool in our toolbox. Inflation and catering are also crucial for planners.

For 2025, we asked Dominguez for his insights on what planners should know in the new year.

To watch the full webinar, click here.

The forces shaping the future of hospitality

The pandemic may lead to hybrid or remote working practices for many hospitality industry employees. But as trends change, so do industry trends.

“The move back to the office is accelerating,” Dominguez said. “When we meet, we collaborate, and there’s a different energy in the collaboration and thought process.”

While Dominguez doesn’t foresee a return to in-person settings for all jobs, big changes are coming.

“These indicators clearly tell us that 80 to 85 percent of jobs in the United States will be spent in the office some time.”

Dominguez also highlighted the potential impact of the incoming administration on mergers and acquisitions. “People also expect M&A activity in the U.S. economy to pick up overall,” he said. “It’s important that when companies merge and acquire, they meet. They always meet.”

great reversal

The recovery in the hospitality industry continues to accelerate, with resorts and second-tier cities leading the way.

“Every major recovery in our industry has started in major metropolitan areas, and those areas have spread pressure down to all other parts of our industry,” Dominguez said. “What you’re seeing during this recovery is Resorts recovered first, followed by second-tier cities. I would say that (second-tier cities) are performing similarly to first-tier cities in terms of availability and prices — they are recovering faster.”

Work more efficiently with artificial intelligence

In 2024, planners explored how artificial intelligence can enhance their work, and 2025 will be no exception. From automating emails to summarizing meeting notes, AI tools are transforming entire industries.

Read more: How artificial intelligence is revolutionizing travel and events

“Everyone should explore where AI can make them more efficient, where it can automate tasks, and where it can improve their business units,” Dominguez said.

However, he stressed the importance of adopting AI at your own pace. “(Planners) shouldn’t feel pressure to go all in. Use it, learn, ask questions, find out where people are using it, and then figure out how to be most effective.”

AV costs continue to rise

When was the last time you used free, secure, high-speed Wi-Fi? You can find this at your local coffee shop, but for most planners, hosting a meeting there isn’t feasible.

“When you’re at Starbucks, they don’t expect 400 people to leave the meeting at the same time, all jumping on a VPN, some using video, some using other data,” Dominguez said. “Technology is constantly improving, but that doesn’t mean it’s going to get cheaper.”

Read more: Event Technology: Audiovisual Staffing

AV remains an expensive project for planners. Dominguez suggested, posing a tough question: Do I need this?

“If I needed all of that, I’d have to pay, and that could be expensive,” he said. Planners may encourage attendees to use iPads or laptops for smaller meetings to reduce costs.

The future of inflation

Inflation remains a challenge.

“Inflation overall remains troublesome. It’s higher than the Fed would like,” Dominguez said. “The December report came out at 2.9%. It went up, not down. It doesn’t get that expensive that quickly, but I think some planners are explaining that to stakeholders who are hearing that things are getting worse. Faced with challenges.”

Catering products in high demand

As of January 2025, food costs have increased 18% compared to 2019. Egg supplies remain a problem, although Dominguez noted that this is not entirely due to bird flu.

“Part of the reason for the egg disruption…has to do with hurricane conditions in the Southeast, which disrupted the egg supply,” he explained. “The good thing about chickens is they reproduce very quickly. So, this usually resolves itself pretty quickly.”

Other dining challenges include soaring cocoa, coffee and olive oil prices due to global weather conditions.

Despite these challenges, Dominguez ended on a positive note: “These are the underlying conditions that tell you food costs are going to stay high. The good news is that it’s now growing at about 3% a year. That’s not the double digits we’ve seen before. increase.”