Hotel owners across the U.S. are pulling back on renovations and new development — and South Florida is no exception. Rising costs, staffing shortages, and slowing travel demand are forcing operators to rethink their investment strategies, even as the region remains one of the country’s premier tourism markets.
A National Trend With Local Impact
According to an August survey by the American Hotel & Lodging Association (AHLA), nearly 32% of hotel owners nationwide have delayed projects, while 24% said they have scaled back development. Only 8% reported moving forward with new investments, and another 8% admitted they’ve scrapped plans entirely. The survey captured responses from almost 400 owners and operators across the country.
The pullback reflects mounting economic headwinds. Nearly half of all hoteliers surveyed said they remain understaffed, while 26% reported declines in upcoming bookings compared with last year. Leisure travel is down 30%, while business, group, and government bookings dropped between 15% and 17%.
“Hotels are facing a perfect storm of higher costs, labor shortages, and shifting consumer demand,” AHLA President Chip Rogers said in releasing the survey. “Owners are being forced to delay or downsize projects they otherwise would have pursued.”
South Florida Feeling the Squeeze
Those challenges are surfacing in South Florida, where new rooms have flooded the market over the past three years. Miami and Fort Lauderdale both recorded year-over-year declines in revenue per available room (RevPAR) in recent quarters, according to CoStar and Hotel Dive. While average daily rates (ADR) have nudged higher, increased supply and softer international demand have pressured margins.
The Colliers Florida Hospitality Report noted that in Q2 2025, statewide ADR rose roughly 3% year-over-year, but occupancy in several South Florida submarkets was flat or down. Fort Lauderdale, in particular, has struggled with pricing power due to new competition and a leveling-off of leisure travel.
Meanwhile, RLJ Lodging Trust, which owns hotels across the region, reported a 2.1% drop in RevPAR in Q2 2025, with South Florida properties undergoing renovations contributing to the drag. The company warned that while upgrades are necessary for long-term competitiveness, they reduce revenue in the short term — a risk some owners are increasingly hesitant to take.
Labor and Cost Pressures
Staffing remains a consistent challenge. Even with higher wages, many properties have not returned to pre-pandemic employment levels, particularly in housekeeping and food-and-beverage roles. Without sufficient staffing, hotels struggle to deliver the service levels guests expect, further complicating recovery.
At the same time, inflationary pressures — from insurance premiums and utilities to food costs — have increased the expense of day-to-day operations. Construction costs remain elevated, making both new development and large-scale renovations more difficult to finance.
The Road Ahead
The picture is not entirely bleak. South Florida still benefits from strong brand recognition, a steady stream of leisure travelers, and marquee events that drive seasonal demand. But with headwinds mounting, operators are moving cautiously.
The key questions in the months ahead: Will international travel rebound strongly enough to boost occupancy? Will developers proceed with ambitious mixed-use hotel projects in downtown Miami and along Fort Lauderdale Beach? And how will owners balance the need for reinvestment with the risk of near-term losses?
For now, the national survey results confirm what many local operators are already experiencing: growth is possible, but it won’t come easy.
