The global hotel industry is expected to record higher guest spending in 2026, even as operators continue to face pressure from rising costs.
New findings from the American Hotel & Lodging Association’s (AHLA) 2026 State of the Industry report point to steady demand growth, supported mainly by domestic travel, while profitability remains constrained by labour and operating expenses.
Guest spending set to rise in 2026
Hotel guest spending in the United States is forecast to approach $805 billion in 2026, marking a year-on-year increase and reinforcing the sector’s role in the wider economy.
The outlook reflects sustained demand for leisure travel and a gradual recovery in business travel, although international arrivals remain below pre-pandemic levels.
The report also highlights the industry’s contribution to public finances. Hotels generated more than $85 billion in tax revenue across local, state and federal levels in 2025, with further growth expected in 2026.
These figures underline the importance of the hotel sector to government revenues, particularly in major urban and tourism markets.
Cost pressures continue to limit profitability
Despite higher spending forecasts, hotel profitability remains under strain. Operating costs linked to labour, energy and supplies continue to run above historical levels.
As a result, gross operating profit per available room has yet to return fully to 2019 benchmarks.
Hotel owners and operators are managing a complex cost environment, balancing wage growth and staff retention with the need to protect margins. While revenue performance has improved in many markets, cost inflation remains a defining challenge for the industry outlook in 2026.
Employment growth and demand outlook
Employment in the hotel sector is expected to expand further in 2026, with workforce numbers projected to exceed 2.2 million in the United States. Total wages and benefits paid by hotel employers are also set to rise, reflecting both job growth and higher average pay.
Looking ahead, domestic leisure travel is forecast to remain the main demand driver, supported by large-scale events and steady consumer interest in travel experiences.
Industry observers note that future performance will depend on the pace of international travel recovery and the ability of hotels to manage costs while maintaining service standards.
Overall, the latest industry data suggests cautious optimism. Higher spending is on the horizon, but sustained improvement in hotel profitability will depend on how effectively operators respond to ongoing cost pressures in the year ahead.
