How Smart Hoteliers Can Still Shine in 2026

By Liam Fraser

The latest U.S. hotel performance outlook has arrived, and let’s just say it won’t be winning any “Feel-Good Report of the Year” awards. CoStar and Tourism Economics have nudged their projections downward once again, with 2025 RevPAR expected to dip by -0.4%. It’s the first annual decline since 2020, and 2026 isn’t looking much brighter across occupancy, ADR, or RevPAR.

Between a softening job market, rising prices, and a general sense of economic “meh,” it’s clear that hoteliers will need to lean into smarter decision-making and tighter planning. The mood isn’t doom—it’s discipline.

Riding the K-Shaped Roller Coaster

If your hotel feels like it’s living in a different world than the property down the road, you’re not imagining things. The great “K-shaped” recovery continues, pulling the industry in two very different directions.

On the upper end, luxury and upper-upscale hotels are cruising along nicely thanks to well-heeled travelers and sturdy corporate demand. Meanwhile, midscale and select-service properties are feeling the squeeze from middle-income guests who are juggling rising living costs.

The post-pandemic recovery is no longer a single storyline, it’s two parallel plotlines that rarely intersect.

Hospitality is Still a Street-Corner Sport

Amid all the grand economic narratives, one truth hasn’t changed: hospitality is hyper-local. One block, one brand, or one city can change everything. That’s why national forecasts should be your backdrop, not your blueprint.

As you prep for 2026, here’s what deserves your full attention:

• Know Thy Business Mix

Which segments are growing? Which are shrinking? And which ones tap out the moment you touch the rate?

• Watch Your Demand Channels Like a Hawk

OTAs, brand.com, direct, who’s truly pulling their weight, and who’s eating into your margins?

• Read the Market Tea Leaves

Events, airlift, comp-set pricing, even nearby construction, all of it can tilt your forecast.

• Measure Profit, Not Just Power

With GOPPAR taking a hit industry-wide, expense control is now just as critical as revenue strength.

And of course, having your data neatly in one place makes all of this a whole lot easier (and keeps you from drowning in spreadsheets).

How to Keep Your 2026 Plan Sharp

1. Forecast from the Inside Out

Start with your own booking pace, segment shifts, and cost trends. National averages are helpful, but your own numbers are the real truth-tellers.

2. Plan for a Split Personality Market

If you operate across different tiers, build separate strategies for each.

Luxury? Focus on experience and rate integrity.

Midscale? Think efficiency, value, and demand stimulation.

3. Guard Those Margins

Labor, utilities, and F&B costs aren’t going anywhere but up. Revisit every cost center and rethink outdated assumptions.

4. Let Go of 2019 Nostalgia

Travel patterns have changed, and so should your benchmarks. Build plans for the world you’re in, not the one you remember.

Your Data Holds the Power

The revised forecast isn’t a storm warning; it’s a reminder to stay sharp. The market is recalibrating, not collapsing. Some segments will stretch, others will tighten, and your success will depend on how well you understand your own performance and how quickly you can adapt.

Hospitality has always been a business won or lost at the local level. Now more than ever, your own data, not national averages, tells the real story.

Because while the headlines set the mood, what happens inside your four walls sets your future.