U.S. Hotels Heading Into 2026 With Costs, Staff, and Bookings All in Flux

Nearly one in five U.S. hotel managers expects demand to fall in 2026 — and that’s only part of the problem facing an industry already squeezed by rising costs and a persistent shortage of workers.

The American Hotel and Lodging Association (AHLA) released its latest industry outlook in March 2026, drawing on responses from 246 hoteliers across the United States. The picture that emerged is far from uniform. Some operators see growth ahead. Others are bracing for a rougher year. And almost all of them are dealing with the same two headaches: costs that keep climbing and not enough people to fill the jobs that need doing.

For travelers, hotel staff, and anyone with a stake in the broader tourism economy, this survey offers a candid look at where the U.S. hotel industry actually stands heading into the rest of 2026.

A Market Divided: What Hoteliers Are Actually Expecting

The AHLA survey makes one thing immediately clear — there is no single story for the U.S. hotel industry right now. Sentiment is scattered across a wide spectrum, from cautious optimism to genuine concern.

The largest single group of respondents, 39%, expects demand in 2026 to hold roughly steady compared to 2025. That might sound reassuring, but flat demand in an environment of rising operating costs is its own kind of pressure. Stable bookings don’t automatically mean stable profits when everything else is getting more expensive.

Meanwhile, 29% of hoteliers expect demand to be higher in 2026, and a smaller group — 6% — believe stronger travel demand will arrive even sooner than expected. On the other side of the ledger, nearly 20% of hotel managers anticipate weaker demand this year, with an additional 4.5% expecting demand to fall significantly.

That means roughly one in four respondents is forecasting some level of decline. In an industry with thin margins and high fixed costs, that’s a meaningful share of operators preparing for harder times.

By the Numbers: How U.S. Hoteliers View 2026 Demand

The data reflects a sector that is genuinely split. Growth-oriented operators and struggling ones are navigating the same calendar year under very different conditions, often depending on their location, property type, and customer base.

The Two Pressures Hitting Hotels From Every Direction

Whatever their demand outlook, hoteliers responding to the March 2026 survey pointed to two shared problems that cut across the industry: rising operating costs and labor shortages.

Higher costs to run a hotel are squeezing operators regardless of how many guests walk through the door. When revenue holds steady but expenses rise, profitability suffers. And when demand softens at the same time costs increase, the math becomes genuinely difficult for smaller and independent operators in particular.

Labor shortages compound the problem. Hotels are service businesses — housekeeping, front desk, food and beverage, maintenance — and when there aren’t enough workers to fill those roles, service quality can slip, remaining staff face burnout, and operators may be forced to limit amenities or reduce room inventory. None of those outcomes are good for guests or for the bottom line.

Industry observers have noted that these twin pressures — cost inflation and workforce gaps — have persisted in hospitality since the pandemic-era disruptions reshuffled the labor market. The AHLA survey suggests that heading into 2026, neither issue has been resolved.

Who Feels This Most — And Why It Matters Beyond the Hotel Lobby

The uncertainty captured in this survey doesn’t stay behind hotel doors. It ripples outward in ways that affect travelers, tourism-dependent communities, and the broader service economy.

For travelers, labor shortages can mean slower check-ins, reduced housekeeping frequency, or scaled-back amenities at properties that simply don’t have the staff to deliver full service. Price pressure from rising operating costs can also translate into higher room rates, even when demand isn’t strong enough to justify them from a pure market perspective.

For hotel workers, an industry under financial strain often means fewer opportunities for wage growth, reduced hours, or instability — particularly at smaller, independently owned properties that lack the financial cushion of larger chains.

For local economies that depend on tourism — think resort towns, convention cities, or destinations built around leisure travel — a weaker hotel sector means reduced tax revenue, less foot traffic for nearby restaurants and shops, and slower recovery from any dips in visitor numbers.

The segment of the market matters too. Luxury and business travel properties may face different pressures than budget and mid-scale hotels. The AHLA survey reflects an industry-wide snapshot, but the experience on the ground varies considerably depending on where a property sits in the market.

What the Rest of 2026 Looks Like for U.S. Hotels

The AHLA’s March 2026 survey doesn’t offer a single forecast so much as a map of competing realities. A meaningful portion of the industry is cautiously optimistic. A significant minority is preparing for decline. And nearly everyone is managing cost and staffing pressures that aren’t going away on their own.

What happens next will likely depend on broader economic conditions — consumer confidence, travel spending patterns, and whether the labor market in hospitality tightens further or begins to ease. Operators with strong demand in their markets may be able to absorb rising costs through higher rates. Those in softer markets face a harder road.

For now, the industry is watching, adjusting, and — as the survey data shows — holding a wide range of views about what the rest of the year will bring.

Frequently Asked Questions

What did the AHLA’s March 2026 hotel survey find?
The survey of 246 U.S. hoteliers found deeply mixed expectations for 2026, with demand outlooks ranging from growth to significant decline, alongside widespread concerns about rising costs and labor shortages.

How many hoteliers expect demand to drop in 2026?
Nearly 20% of respondents expect demand to be weaker in 2026, and an additional 4.5% expect demand to fall significantly — meaning roughly one in four operators is forecasting some level of decline.

What are the biggest challenges U.S. hotels face in 2026?
According to the AHLA survey, the two most pressing issues are increasing operating costs and an insufficient number of workers to staff hotel operations.

What share of hoteliers expects demand to stay the same as 2025?
The largest single group — 39% of respondents — expects 2026 demand to be roughly flat compared to 2025.

Does the survey predict what will happen to hotel room prices?
The survey does not directly address room pricing forecasts; it focuses on demand expectations and the operational pressures hoteliers are currently facing.

Will labor shortages in hotels get better in 2026?
The AHLA survey identifies labor shortages as an ongoing problem, but does not provide a specific forecast for whether workforce availability will improve during the year.