Market Trends

🏨 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.

📈 HSMAI Foundation's report, "Case Study: The Future Talent Pipeline," was released in McLean, Virginia, focusing on generative AI in hospitality. Students rated AI task confidence at 3.24/5 but academic preparation at 2.78/5. Only 16% used AI in job searches, highlighting a recruitment-expectation gap. The study stresses structured AI literacy for hospitality organizations. Brian Hicks, HSMAI CEO, and Amanda Voss, HSMAI Foundation Chair, emphasized AI's role in operational readiness. Report authored by Michael J. Goldrich, Vivander Advisors.