Ryan A. O'Donnell Discusses Hospitality Industry Challenges in Law360 Interview
Chair of Pullman & Comley’s Hospitality practice Ryan A. O'Donnell was interviewed by Law360, “Pullman & Comley Hospitality Leader On Travel, Taxes, Tariffs,” where he discussed the current trends affecting the hospitality sector. “The thing I hear the most is sort of different iterations of the same theme, which is uncertainty… there's just a lot happening right now," he says. " And the uncertainty impacts everything: whether you're going to expand your property; how many people you could hire; who you can hire; what's the vibe of your guests.”
Ryan noted that tariffs are directly impacting expansion and renovation plans, as well as the day-to-day costs for hotel operators. “There's a real hesitancy to commit to expansion and even renovations, because the cost of goods — you go back to that theme of uncertainty — they're just not sure how much materials are going to cost.” He added that this hesitancy has created a “real paralysis right now,” with many owners opting to delay decisions in hopes that prices will stabilize within the next 6 to 12 months.
The financial strain extends beyond renovations. “[E]ven food costs have gone up for hotels that have restaurants,” Ryan explained, adding that owners are grappling with whether to absorb costs or pass them on to guests. “If you're not as big of a group, can you afford to eat those costs even if you wanted to? That's certainly a concern.”
Financing has also become more challenging. Ryan said he is “seeing people trying to restructure whatever deals that they've got, and trying to really push that off because it's going to be hard to do,” pointing out that “financial institutions are kind of nervous.” When it comes to securing funding for new projects, he noted that lenders are scrutinizing transactions more closely and that deals that were once viable “are gone now.”
Beyond tariffs and financing, Ryan pointed to other significant concerns, including pending federal tax legislation and declining international tourism. “There's this new level of wariness or frustration with the U.S. that is not of their own making… they're [hospitality companies] really trying to run promotions and reach out to people who might have concerns about how hospitable is America to folks from overseas.”
Staffing challenges also remain at the forefront. “Even more than the tariff issue, some people's workforces dropped because people were afraid to come to work, even if they were in the country legally,” Ryan said. “Labor was already tight, and now it’s even tighter.”
Despite the uncertain landscape, Ryan underscored the industry’s resilience and continued commitment to hospitality: “These companies’ commitment to hospitality remains rock steady.”