Today, the 2025 Hotel Labor Costs & Trends report was released on HotelData.com, revealing how U.S. hotels have tightened labor models throughout the year to offset rising wages, higher operating costs, and revenue performance that consistently fell short of expectations.
The report shows that even as wages rose by up to 5.9%, labor cost per occupied room rose between 2% and 11.2%, and headcount grew between 4% and 9%, operators protected margins by cutting hours per occupied room and driving major gains in labor efficiency. From January to September, hours per occupied room dropped 7-15% in guest services, housekeeping, and management, while productivity increased for most frontline and leadership roles.
These efficiency gains came as top-line results lagged projections. Hotels had set aggressive targets for 2025, expecting room revenue budgets to grow 14.1% year over year in the first nine months, even as they anticipated ADR would decline between 1.9% and 2.4%
These results demonstrate how hotels maintain profitability through enhanced labor productivity, improved forecasting, and optimized staffing based on demand. The 2025 Hotel Labor Costs & Trends report draws on aggregated data from thousands of hotels across the U.S. utilizing Actabl’s operational and financial platforms.
“Labor defined hotel performance more than any other cost category in 2025,” said Sarah McCay Tams, head of research at Actabl. “Operators entered the year expecting strong revenue, but softer top-line results and rising labor costs forced a new level of discipline. What stands out is how hotels improved productivity without cutting teams, instead using forecasting, cross-training, and scheduling accuracy to protect margins in a challenging environment. Labor efficiency is now as important as rate strategy. In 2026, the hotels that outperform will be those that connect labor directly to demand and deploy staff dynamically.”
Key Findings
-
Labor became the defining operational theme of 2025
- Hotels entered the year with high revenue expectations, but ADR softened and actual performance trailed both budget and forecast. DIn spite of this, labor efficiency improvements allowed operators to keep profitability near 2024’s levels.
-
Hours per occupied room fell across all major departments
- From January to September:
-
-
- Guest Services HPOR decreased 13.5%
- Housekeeping HPOR decreased 7.1%
- Management HPOR decreased 14.6%
- Hotels cut hours while preserving service delivery, reflecting better demand alignment, cross-training, and refined staffing plans implemented mid-year.
-
-
Position-level productivity improved as well
- Minutes per occupied room (MPOR) improved within 2025 across front-line and leadership roles:
-
- Room attendants: 5.5% faster
- Guest service representatives: 12.7% faster
- AGMs + GMs: ~14% faster
- Overall, MPOR dropped 9% across evaluated roles.
-
Wages rose, but smarter deployment softened the impact
- Average wages increased 3.7% to 5.9% year over year, and cost per occupied room rose 2% to 11%. Operators limited margin erosion because they optimized shift structure rather than reducing headcount.
-
Headcount increased, demonstrating stability, not cuts
- Hotels grew headcount 9% through the summer and maintained 4% higher staffing levels than January, using overtime as a controlled buffer for demand rather than a runaway expense.
-
Hotel type shaped labor intensity more than ever
- Hours per occupied room varied widely:
-
- Extended Stay: 1.30 (most efficient)
- Select Service: 1.44
- Full Service: 2.57
- Resorts: 4.48 (highest labor burden)
- These distinctions underscore the importance of hotel-type-specific forecasting and staffing models heading into 2026.
Preparing for 2026
The report outlines three priorities operators should consider in 2026 to maintain profitability as wages remain elevated and demand plateaus:
- Integrate forecasting directly with labor. Even small forecasting variances can quickly misalign staffing with demand, making static payroll budgets no longer sufficient.
- Prioritize efficiency over cuts. With wages and labor costs continuing to rise, hotels cannot rely on labor cost relief. Operators should build on 2025’s productivity gains instead of reducing headcount to protect margins.
- Service models will continue to evolve. Refinements to stayover cleaning, digital engagement, and streamlined F&B will remain essential to reducing wasted hours while maintaining guest satisfaction.
Webinar to Learn More
Actabl is hosting a live webinar at 3:00 pm EST on December 11th to unpack the full results of the 2025 Labor Costs & Trends Report. Register here.
Access the Report
Visit HotelData.com to read the 2025 Hotel Labor Costs & Trends report and subscribe for upcoming performance insights and forecasts.
About HotelData.com
HotelData.com is a free industry data resource providing hotel owners, operators, and brands with benchmarks and insights to inform smarter business decisions. Powered by Actabl’s technology platform, HotelData.com delivers the clarity leaders need to drive profitability and growth through performance metrics, practical planning guides, and more. Recent publications include the Hotel Profitability Performance Report for Q3 2025 and the 2025–2026 Budget Planning Guide.
Sarah McCay Tams
Head of Editorial – actabl
HotelData.com
