Market Trends

🌏 Japan's travel market achieved US$94.2 billion in gross bookings in 2025, marking an 8% increase, with a record 42.7 million inbound arrivals. Outbound travel was 14.7 million. A stronger yen validated growth, shifting Japan from an outbound market to focusing on inbound tourism. Policymakers now view tourism as crucial for the economy, emphasizing value over volume, regional distribution, and handling success-related challenges.

📈 U.K. online travel agencies (OTAs) are projected to reach £10.3 billion in gross bookings by 2025, marking a record high. However, OTA market share continues to decline for the third year. Supplier-direct share is expected to grow slightly from 78% to 81% by 2029. The distribution battle is stabilizing, with hotels as the exception where OTAs and direct bookings maintain equal competition. Phocuswright's 2026 report analyzes these trends and potential changes.

🏨 PPHE Hotel Group Ltd, founded in 1989 and listed on the London Stock Exchange, operates 39 hotels with about 9,000 rooms and 8 campsites with around 6,000 units in Europe and beyond. In 2025, the group achieved revenues over €500 million, a 5.3% increase from the previous year, and a gross operating profit exceeding €160 million. The group's real estate value is over €1.2 billion. David Fattal won the 2024 Hospitality-ON Grand Prix for expanding the Fattal Group to over 300 hotels.

📚 Major hotel groups have increased margins and customer ownership thanks to direct booking strategies over the past decade, as of May 28, 2026. Despite stable OTA market share, hotels benefit from lower commission costs and enhanced loyalty programs. U.S. business travel brands see more direct bookings compared to leisure properties internationally. AI travel assistants might impact both hotel and OTA visibility, posing a future distribution challenge.

🏨 Top-quartile branded assets in 2026 are refinancing into competitive five-year takeouts, while weaker assets struggle with lenders. Rate strategies from 2023-2024 now create disparities in profit, with select-service hotels outperforming full-service. Midweek business rebounds, driven by secondary markets' reshoring and healthcare. PIP costs have inflated 25-40%, and insurance renewals increased by 20-40%. Construction starts are below historical averages, protecting existing assets. Strategic refinancing and asset management are crucial for 2026's market, sorting hotels into "haves" and "have-nots.

📈 U.S. hotel performance in 2026 faces uncertainty due to Iran, Israel, and U.S. conflict. Geopolitical instability suppresses travel, affecting demand. U.S. hotels could benefit from domestic travelers staying in-country and international travelers avoiding the Middle East. Increased government and defense contractor activity may boost business travel. However, corporate travel might decrease, and rising costs and financial volatility could impact profitability. Hotels focused on active demand capture and profit optimization will better navigate these challenges.

📊 New BI reports are available on Mirai's extranet for hotels, enhancing direct sales analysis by integrating data on channel mix, web traffic, paid media, and metasearch engines. These reports offer insights into distribution, demand, and digital investment, aiding hotels in refining strategies for improved profitability and competitiveness. Key features include channel performance evaluation, web demand analysis, and comprehensive metrics for advertising and metasearch platforms, simplifying decision-making for more efficient direct sales.

📈 2025, U.S. lodging industry faced stalled revenue growth at 2.6%, matching the inflation rate, but below the 5.2% average. Expenses grew faster at 3.1%, reducing GOP margins from 35.1% to 34.8%, and EBITDA margins to 22.8%. Only resorts and luxury hotels saw profit gains, driven by increased ancillary revenues. Labor costs rose 2.9%, while IT expenses surged 4.6%. With RevPAR growth projected at just 1.2% in 2026, sustaining profits remains challenging amidst high operational costs.