It’s no secret government policy changes have shifted the ways domestic organizations operate in 2025. For U.S. hotels, slowdowns of government-related business have impacted a variety of stakeholders in the space, and depending on the portfolio, some more than others.

The past year has highlighted both the challenges and the resilience of the DACH hospitality sector. Germany and Austria have had to contend with sluggish growth, high energy costs, and persistent inflation, while broader geopolitical uncertainty – from international trade tensions to the ongoing war in Ukraine – continues to weigh on sentiment. Switzerland, by contrast, has remained comparatively stable, supported by strong domestic demand and its position as a high-value global destination. These differing dynamics illustrate the complexity of the region but also underline its importance as one of Europe’s most resilient markets.

Tourism policy issues rarely dominate the headlines—at least at first glance. Although tourism is generally associated with summer, sun, and sea, it is much more than that. As a cross-sector industry, it encompasses more than just the hotel and accommodation market, travel agencies, and the restaurant industry. Infrastructure, leisure and cultural activities, nature and nature conservation, public administration, and much more are also part of this diverse economic sector. This heterogeneity alone highlights the challenge for the industry itself, but also for those representing its interests in politics. At the same time, the political framework (laws, regulations, and subsidies) serves as a compass for tourism activities, and tourism policy therefore plays a central role for us as consultants.

Any hotel chain knows of the existence of the chain scale, a ranking system based on hotels’ average daily rate and the number and quality of amenities and services they offer. The chain scale offers six classes—luxury, upper upscale, upscale, upper midscale, midscale and economy— and chains can move from one to another as they make changes to hotels, such as adding (or subtracting) an amenity or altering their room rates. Are there any advantages to moving up or down on the chain scales? Absolutely, say industry experts. First, let’s look at why the chain scale is important.

Sustainability is no longer a niche choice, it’s a strategic imperative woven into the fabric of business, policy, and consumer expectations. Investors are demanding transparency, regulators are setting stricter disclosure requirements, and customers are increasingly choosing brands that align with their values. The conversation has shifted from “why” sustainability matters to “how” it is embedded across operations, governance, and long-term strategy. At the same time, technological innovation, regulatory convergence, and growing climate risks are accelerating the urgency for action.