Hotels are entering 2026 under continued pressure from rising operating costs and persistent labour shortages, even as travel demand remains stable.
A recent survey by the American Hotel & Lodging Association (AHLA) shows that cost inflation and workforce gaps are shaping the outlook for the global hotel industry and wider travel sector.
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The findings point to a sector that has recovered demand but continues to face structural challenges affecting profitability and operations.
Rising operating costs impact hotel profitability
Cost pressures are now the leading concern for hotel operators. Around 71% of surveyed hoteliers identified supply and input costs as their main challenge, reflecting inflation across energy, food, and maintenance expenses.
Higher labour costs are also contributing to margin pressure. Industry data shows that total wages and benefits in the sector are continuing to rise, with spending expected to approach $131 billion in 2026.
These combined cost increases are limiting profit recovery. Gross operating profit per available room remains below pre-pandemic levels, despite steady occupancy and pricing performance.
For many operators, the focus has shifted from revenue growth to cost control and operational efficiency.
Staffing shortages continue across hotels
Labour shortages remain widespread across the hotel industry, with more than half of properties reporting they are understaffed heading into 2026.
Recruitment challenges persist despite higher wages and improved benefits. Previous AHLA surveys indicate that around two-thirds of hotels have struggled to fill open roles, particularly in housekeeping and front desk operations.
The issue reflects broader labour market trends, where job vacancies continue to outpace available workers. In hospitality, the gap is compounded by competition from other sectors and changing workforce expectations.
Although employment levels are gradually increasing, total staffing remains below pre-pandemic benchmarks in many markets.
Travel demand remains stable but uneven
Despite operational challenges, travel demand is expected to remain steady through 2026. Industry forecasts show continued growth in hotel guest spending, reaching an estimated $805 billion.
Leisure travel continues to drive the majority of demand, while international inbound travel has yet to fully recover in some regions.
However, demand trends are not uniform. Some hotel operators report softer booking patterns in certain segments, including business and group travel, alongside regional variations in performance.
The overall outlook suggests stable demand conditions, but limited flexibility for operators dealing with cost inflation and workforce constraints.
Ultimately, the latest AHLA data highlights a hotel industry that has regained demand but continues to adapt to structural pressures. Rising costs and staffing shortages are expected to remain key factors shaping performance across the global hospitality and travel sectors in the near term.
