From AI to inflation, what’s ahead for hospitality in the New Year
In 2024, Michael Dominguez, CEO of Associated Luxury Hotels International (ALHI), told the Smart Meetings community that the hospital industry was entering a new normal stage following the pandemic. AI was also a new shiny tool in our toolbox. Inflation and F&B were also crucial for planners.
For 2025, we asked Dominguez for his insight into what planners should know in the new year.
To watch the full webinar, click here.
The Forces Shaping Hospitality’s Future
The pandemic may have contributed to many hospitality industry employees’ hybrid or remote workstyles. But as the tides shift, so do industry trends.
“The move [back] to the office is picking up some steam,” said Dominguez. “When we meet, we collaborate, and there’s a different energy in collaboration and thought processes.”
While Dominguez doesn’t foresee all jobs returning to in-person settings, significant changes are on the horizon.
“[The] metrics are telling us specifically that anywhere from 80% to 85% of jobs in the U.S. will have some time in the office.”
Dominguez also highlighted the potential effects of the incoming administration on mergers and acquisitions. “There’s also an anticipation that merger and acquisition activity overall in the U.S. economy is going to pick up,” he said. “The important thing is that when companies merge and acquire, they meet. They always meet.”
The Big Comeback
The hospitality industry’s recovery continues to accelerate, with resorts and second-tier cities leading the way.
“Every other major recovery in our industry started with the major metro areas, which bled compression out to all other parts of our industry,” said Dominguez. “What you saw during this recovery was that resorts recovered first, followed by second-tier cities. I like to say [second-tier cities] are behaving like first-tier cities in terms of availability and pricing—they recovered much faster.”
Working More Efficiently With AI
In 2024, planners explored how AI could enhance their work, and 2025 is no different. From automating emails to summarizing meeting notes, AI tools are transforming the industry.
Read More: How AI is Revolutionizing Travel and Events
“Everybody should be exploring where AI could make them more effective, where it could automate tasks and where it will improve their business units,” said Dominguez.
However, he emphasized the importance of approaching AI adoption at one’s own pace. “[Planners] shouldn’t feel pressured to jump all in. Play with it, learn, ask questions, find out where people are using it and then figure out how they can be most effective.”
AV Costs on the Rise
When was the last time you had free, secure, high-speed Wi-Fi? You could find this at local cafes but hosting meetings there isn’t feasible for most planners.
“When you’re at Starbucks, they’re not anticipating 400 people breaking out of a meeting simultaneously, all jumping onto a VPN, some using video and some using other data,” Dominguez said. “The technology continues to improve, but that doesn’t mean it gets cheaper.”
Read More: Event Tech: Audiovisual Staffing
AV remains a costly line item for planners. Dominguez advised, asking the tough question: Do I need this?
“If I need all that, I’ll have to pay for it, which can get expensive,” he said. Planners might encourage attendees to use their iPads or laptops for smaller sessions to reduce costs.
The Future of Inflation
Inflation remains a challenge.
“Inflation overall is still sticky. It’s higher than what the Federal Reserve wanted,” said Dominguez. “The December report came out at 2.9%. It went up, not down. It’s not getting as expensive as quickly, but I think some planners have a challenge explaining that to stakeholders who are hearing that things are coming down.”
F&B Products in Demand
As of January 2025, food costs are up 18%, compared to 2019. Egg supplies remain a concern, though Dominguez noted it’s not entirely due to bird flu.
“Part of that egg disruption…had to do with the hurricane conditions in the Southeast, which disrupted the egg supply,” he explained. “The good thing about chickens is they repopulate quickly. So, this usually takes care of itself pretty fast.”
Due to global weather conditions, other F&B challenges include soaring cocoa, coffee and olive oil prices.
Despite these challenges, Dominguez ended on a positive note: “Those are the underlying conditions telling you food costs will stay elevated. The good news is it’s now elevated by maybe 3% annually. It’s not the double-digit increases we saw before.”
