most US hotels will struggle in 2026, but there are bright spots

📌 Key Takeaways

Expenses are growing 5-10% annually while revenue stagnates, creating math that only operational discipline and differentiation can solve
30% of hotels grew in 2025 despite flat industry performance according to STR, proving growth exists even in stagnant markets for operators with strong plans
75% of guests make booking decisions based on reviews, making operational excellence and service delivery direct drivers of pricing power

Today's insight from the 2026 ALIS Conference in Los Angeles, where thousands of hotel investors, owners, and operators gathered to discuss what's working in a plateaued market. Listen to Josiah explain in his words now →

The US hotel industry's top line is flat. Occupancy is stagnant. ADR growth is minimal.

And yet 30% of hotels are growing.

STR's Isaac Collazo shared that data during ALIS in LA this week, and I can’t stop thinking about it. Because if 30% are growing in a flat market, that means the other 70% are losing ground.

The question isn't whether growth exists. It's whether you're one of the ones capturing it.

The Math That Doesn't Work

Here's the brutal reality Kalibri CEO Cindy Estis Green laid out in her 2026 forecast:

-1.5% year over year change to occupancy
+.5% year over year change to ADR
-1.0% year over year change to RevPAR

But expenses? Growing 5-10% annually.

That math doesn't work. You can't outpace 5-10% cost inflation when the topline is flat.

So what do you do?

TripAdvisor CEO Matt Goldberg shared an insightful point: "You have to de-average everything and look at where the pockets of growth are."

Not "here's where the industry is going." But "where are the specific opportunities that apply to my property, my market, my positioning?"

In the words of Isaac Collazo:

❝

There's still growth out there. You just have to have a good plan.

Isaac Collazo, STR

That shifts it from passive to active. Not "what's happening to us" but "what are we doing to drive results?"

The Only Question That Matters

What's your plan for growth in 2026?

Not the industry consensus. Not an analyst forecast. Your specific plan for outperforming your competitive set.

Because the owners and operators who are growing aren't waiting for market conditions to improve. They're executing now.

Three areas kept surfacing at ALIS 2026 as where differentiation happens:

1. Operational Brilliance at the Basics

Expedia's CEO Ariane Gorin put it this way: "Being brilliant at the basics is the difference between who gets a few points of growth and who doesn't."

Not revolutionary innovations. Not massive capital investments. Brilliant execution of fundamentals.

She also said something that applies beyond distribution: "Only do what only you can do."

Think about that in your operating environment. What can your hotel do that no one else in your market can replicate? That's where pricing power lives.

When 75% of guests make booking decisions based on reviews, operational excellence becomes a revenue strategy. Guest reviews aren't marketing—they're the trailing indicator of everything you do upstream.

2. Visibility Into Every Dollar

When expenses are running 5-10% ahead of revenue, you need more than gut instinct. You need granular visibility into every line item.

Multiple CEOs and CFOs I spoke with talked about using tools like those from Actabl to get detailed performance data across their portfolios. Not quarterly reports. Real-time insight that lets you act now, not three months from now.

The question isn't "what happened last quarter?" It's "what's happening today that I can adjust tomorrow?"

Seeing the data matters. But converting insight into action—whether that's right-sizing labor, optimizing service delivery, or managing maintenance—that's where results happen.

3. Differentiation Through Experience

The bifurcation in chain scales is accelerating. At the lower end, hotels are becoming more transactional—clean bed, safe room, efficient process. Robotics and automation will play bigger roles there.

But at the upper end? Human connection becomes more valuable, not less. Stuart Greif covered this in depth earlier this week, but the luxury and ultra-luxury segments are growing significantly.

Even if you're not in that segment, the principle applies: What makes your guest experience non-replicable?

Multiple operators talked about building playbooks of creative experiences and activations for their teams. Not because teams lack ideas, but because everyone's short on time. Give them proven plays they can execute without reinventing the wheel.

The AI Timing Question

AI came up in nearly every conversation. But the interesting split was short-term versus long-term ROI.

Short-term wins: Operational efficiency. Staff scheduling. Process automation. These deliver measurable returns now.

Long-term play: How people discover and book travel is fundamentally changing. Guests are using ChatGPT, Claude, and Gemini to plan trips rather than starting with Google search.

If your property data isn't structured for LLM ingestion, you're invisible in these searches. I heard multiple stories of guests staying at hotels with specific amenities, asking LLMs if those amenities exist, and getting wrong answers.

That's a revenue leak you can't see yet. But it's coming.

The hotels that document, categorize, and structure their data now will have a massive advantage when this shift fully materializes.

The Robotics Reality

Robotics weren't just on stage—they were in many private conversations I had.

The consensus: Robotics will accelerate in transactional segments. But in experiential hospitality—where connection and service create the value—human delivery remains essential.

This isn't about choosing technology or people. It's about understanding which parts of your operation benefit from automation and which parts require human judgment and care.

The operators winning aren't asking "should we use AI?" They're asking "which specific problems can AI solve better than our current approach?"

What Outliers Know

The 30% of hotels that are growing aren't smarter or better funded than everyone else.

They're executing on fundamentals. They're measuring what matters. They're differentiating where it counts.

They have a plan—and they're working it.

The biggest danger isn't a flat market. The danger is assuming flat industry performance means there's nothing you can do. Because while you're waiting for conditions to improve, your competitors are capturing the growth that exists.

Three Questions to Answer This Week

1. What's your specific plan for growth in 2026? Not "we'll work hard" or "we'll see what happens." What are the three operational levers you're pulling to outperform your comp set?

2. Where do you have visibility gaps? Can you see in real-time which parts of your operation are underperforming? Or are you flying blind until the monthly report?

3. What can only your hotel do? What creates non-replicable value for guests? That's where pricing power and loyalty come from. If you can't answer this clearly, you're competing on price.

The ALIS Conference reminded me that even in cloudy market conditions, there are operators building, innovating, and outperforming.

The question is whether that's going to be you or your competitors.

Because 30% are growing. The other 70% are losing ground.

Which side of that divide are you on?

This insight comes from conversations at the ALIS Conference in Los Angeles, where hotel investors, owners, and operators gathered to discuss growth strategies in a plateaued market. Listen to the full recap →

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Where the Hotel Growth Is Hiding in 2026: What Top Owners and Operators Know