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Rising Costs Impact Guest Satisfaction in Third-Party Managed Hotels

Travel and Hospitality

BusinessHonor: Insights on Hotel Guest Experience

Business Honor
04 September, 2025

Rising operational costs reduce guest satisfaction in third-party hotels, mainly affecting food quality and facility upkeep.

With the cost of operations continuing to rise, guest satisfaction for third-party managed hotels in North America is starting to feel the pinch, finds the just-published J.D. Power 2025 North America Third-Party Hotel Management Guest Satisfaction Benchmark. The survey shows significant decreases in guest satisfaction in critical areas, most noticeably in the quality of food, restaurant cleanliness, and ambiance of food and beverage outlets. Hotel amenities also fell in satisfaction, with issues being raised regarding the maintenance of exteriors, grounds, swimming pools, and gyms.

In spite of these difficulties, guest ratings on staff service and guest room appearance have been solid and stable from 2024 levels. These results indicate that frontline service continues to be consistent while back-of-house processes and facilities maintenance are taking the strain of higher costs.

“In hotels where the owner is not operating the property, guest satisfaction ultimately rests with third-party management companies that operate on behalf of hotel owners,” said Andrea Stokes, hospitality practice lead at J.D. Power. While these companies aim to deliver consistent experiences, gaps are emerging—especially in food and facility standards—which often signal rising operational challenges.

The report also lists best-performing third-party hotel management firms. Atrium Hospitality took the number one position with a score of 722 points out of 1,000. Crescent Hotels & Resorts trailed just behind at 708 points, followed by Columbia Sussex and Davidson Hospitality Group jointly taking the third spot with 703 points each. The average industry rating was 682 points. As more demanding travelers, it will be a major differentiator between guest satisfaction in the future and whether hotel management companies will be able to sustain high service levels despite economic pressure.