The Real Supply Problem Isn’t Hotels. It’s Perspective.

Skift dropped a hot take this week—one that may look like breaking news, but feels like a flashback to 2019. The excerpt, featured in their newsletter promoting a new report, focuses on how hotel supply growth is slowing and how brands are turning to mergers and acquisitions to expand their footprint.

Here’s the headline:

“These constraints have slowed hotel openings, causing U.S. hotel supply growth to drop from a pre-pandemic average of 1.3% year-over-year to just 0.5% today.”

The analysis continues: hotel construction is expensive, labor is tight, and the solution (apparently) is for big brands to gobble up boutique and midscale players in search of growth.

What’s missing?

Only the biggest shift in traveler behavior of the past decade: The rise—and staying power—of short-term rentals.

Let’s Talk About the Real Supply Story

Hotel room supply is only part of the equation. Today’s traveler is choosing STRs not because hotels are unavailable—but because hotels are uninspiring.

While developers stare down construction delays and cost overruns, travelers are booking cozy cabins, urban lofts, and lakeside bungalows. They’re opting for personality over predictability. Space over lobby perks. A vibe over a brand.

Yet reports like this keep centering hotel brands like they’re the main character in a story they no longer control.

This Isn’t a Pandemic Blip. It’s a Behavioral Reset.

STRs didn’t surge just because hotels shut down in 2020. They surged because people re-evaluated what they valued:

• Privacy

• Design and uniqueness

• The ability to cook, work, and live in a space—not just crash in one

Now that behavior is baked in. Entire generations of travelers, especially Millennials and Gen Z, see STRs as the norm, not the alternative.

Yet we’re still talking about hotel supply like it’s the only line on the chart that matters?

M&A Won’t Save a Model That’s Misaligned

Yes, it’s news that hotel giants are acquiring boutique brands. But that move isn’t strategy—it’s a scramble. A workaround. A band-aid for the fact that the traditional model isn’t adapting fast enough to the way people actually want to travel.

We don’t need more hotel rooms. We need better thinking about what travelers want.

And frankly, that starts by acknowledging they don’t all want what the hotel industry is selling.

What This Means for DMOs, Developers, and Destination Leaders

If you’re still building strategy based on hotel demand curves without factoring in STRs, you’re flying blind.

If your destination's marketing plan centers hotel partnerships but ignores your short-term rental ecosystem, you’re missing opportunity and relevance.

And if your boardroom is still asking, “When will things go back to normal?”—they already have. It just doesn’t look like what you remember.

Traveler-first means looking at how people actually travel now—not how brands want them to.

And in today’s travel economy, it’s not hotel supply that’s constrained. It’s perspective.

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Want to talk about how to make your destination strategy reflect reality instead of report headlines? Let’s connect.