WASHINGTON, D.C.—The American Hotel & Lodging Association (AHLA) released its 2026 State of the Industry report, providing a data-driven look at hotel performance, operating conditions, and the sector’s outlook for the year ahead. AHLA projects improved opportunity in 2026 as major global events such as the FIFA World Cup and America250 help lift travel demand and the industry continues to invest in hiring and operations.
This is a marked difference from the past year. In 2025, hotels operated in a constrained environment marked by persistent cost inflation, uneven recovery across markets, and shifting travel patterns. While domestic demand remained relatively stable, the report underscores that “stability” is not the same as a full return to pre-pandemic fundamentals, particularly once inflation and expense growth are accounted for.
“AHLA’s State of the Industry Report is clear in its message: hotels continue to deliver economic value in every community, and we expect to see improvement over the last, challenging year,” said Rosanna Maietta, President & CEO of AHLA. “Even as operating costs remain elevated and profitability lags in many markets, hotels supported more than two million jobs last year and generated tens of billions of dollars in tax revenue for governments at every level. This year we expect consumer spending to rise and our workforce to expand—showing some positives amidst many market challenges as our industry continues to persevere.”
Key Findings from the Report
- Hotels generated $85.1 billion in local, state, and federal taxes in 2025 (up $1.7 billion from 2024), and that total is projected to rise to nearly $87 billion in 2026.
- Hotel guest spending in 2026 is expected to reach nearly $805 billion, a 1.7 percent increase over 2025.
- Rising operating expenses were a primary factor keeping gross operating profit per available room (GOPPAR) at roughly 90 percent of 2019 levels.
- The industry paid nearly $128 billion in wages and benefits in 2025 and is projected to approach $131 billion in 2026.
- The hotel workforce is projected to grow by more than 30,000 jobs in 2026, bringing direct hotel operations employment to approximately 2.2 million.
The report also notes that domestic leisure travel remains the largest component of U.S. travel activity, while international inbound travel remains below pre-pandemic levels, an important headwind for destinations that rely heavily on overseas visitation and high-spend travelers.
AHLA’s report emphasizes that converting resilience into sustained growth will depend on a supportive operating and policy environment, including measures that facilitate travel, address cost pressures, and strengthen workforce development.
Additional Report Highlights
Energy and utility costs are rising as cities and states implement Building Performance Standards (BPS) and other climate mandates that require commercial properties to reduce energy use and emissions. These regimes, now in place or ramping up in states such as Colorado and California, require benchmarking, reporting, and retrofits that drive capital expenditures and operating costs for existing buildings, including hotels.
While compliance deadlines and penalties vary, the underlying trend is clear: properties that fail to meet energy-performance targets face fines and reputational risk, and those in compliance pay higher upfront costs for upgrades that are only partially recoverable through energy savings. Such mandates increase both the cost of operations and the complexity of portfolio management as hoteliers must plan multi-year capital programs on top of other cost pressures. Of note, some of the greatest cost increases from 2019 through 2025 are largely out of hotel operators’ control. Utility costs are 27.5 percent greater in 2025 than in 2019.
Capital Equipment & Smallwares: Investing Strategically
Rising material and labor costs, coupled with global supply chain disruptions, are driving up equipment prices. Agile responses include:
- Placing orders early to mitigate potential price escalations.
- Investing in multifunctional, ENERGY STAR® certified, and Internet of Things (IoT)-enabled equipment to reduce long-term costs and improve labor efficiency.
- Considering refurbished equipment and extended warranties to stretch budgets.
Operators can use predictive analytics tools to forecast needs and make informed purchasing
decisions.
Amenities: Balancing Sustainability and Cost
Tariffs and sustainability mandates are reshaping amenity costs.
- Paper-based and certified packaging adds 4–7% in costs.
- Operators can buy in bulk, avoid customization, and choose non-committed stock lines to maintain flexibility.
- Adopting certified sustainable packaging can potentially enhance brand value and help offset the impact of rising material costs.
Sustainability
An AHLA-commissioned survey in Fall 2025 found that 67 percent of travelers considered sustainability very or somewhat important, with businesses travelers and travelers aged 18 to 24 most likely to do so. Nearly three in five adults said they would be willing to pay more for a hotel with strong sustainability practices. Hotels can boost traveler confidence in their sustainability practices through participation in programs such as Hotel Kitchen, a platform for food waste prevention, training, and sustainable hotel management created by AHLA and the World Wildlife Fund; and by pursuing sustainability certification through programs such as Green Key Global, a joint venture of AHLA and the Hotel Association of Canada. More than 2,100 hotels in the U.S. and Canada have achieved this certification, with more to come through partnerships with nine brands and 45 hotel management groups.
Develop Responsibility as a Core Value Proposition
Guests, communities, and regulators expect progress on sustainability, access, and price transparency. With the global ecotourism market expected to grow by 14.7 percent from 2023 to 2032, design and retrofit for efficiency and resilience, including water and waste reduction by design. Adopt accessible design so spaces work for all ages and abilities. Commit to transparent pricing to meet customer needs—adopting all-in pricing for luxury travelers and offering bare-bones rates with add-ons for cost-conscious travelers.
The 2026 State of the Industry report is available here.
