Tariff Impact on Hotels: Higher Costs, Delayed Renovations, Less Demand
Photo Credit: U.S. President Donald Trump in a ceremonial signing on tariffs in the White House Rose Garden on April 2, 2025. Flickr / White House
Skift Take
Some hoteliers are freaking out about Trump's new tariffs. They're hoping the move is just negotiating theater.
The hotel sector faced a complex, fast-changing new reality as tariffs announced by President Trump on Wednesday threatened to increase the cost to outfit, renovate, and develop properties — and to potentially reshape travel patterns.
"All that concrete coming from Mexico and all that lumber from Canada will now be more expensive, putting downward pressure on the number of hotels breaking ground or getting renovated," said Jan Freitag, national director, hospitality analytics at CoStar Group.
Estimates of the tariff impact varied. Michael Bellisario, a senior research analyst at RW Baird, noted that internationally sourced materials typically represent between 15% and 20% of a development project's total budget, and much of it is imported from China and Vietnam.
"All else being equal, the cost to build a hotel could be about 5% to 10% higher now," Bellisario wrote.
However, hoteliers may find "a "silver lining" of reduced price competition
