Hotel Revenue Managers Brace for 2026: Strategies Amid Uncertainty

Hotel revenue managers are strategizing for 2026 amid anticipated modest growth and market-specific challenges. With corporate travel and international inbound showing mixed signals, the focus is on securing group bookings early and leveraging digital strategies such as generative AI optimization. The World Cup and other major events present both opportunities and risks, requiring nimble and adaptable approaches to pricing and marketing.

Strategizing for 2026

After a year fraught with unpredictability, hotel revenue managers are gearing up for 2026 with cautious optimism. Leah McFarland, Senior Vice President of Revenue Strategy at Crestline Hotels & Resorts, highlights the need for a micro-focused approach to rate strategy, acknowledging that growth will vary by city. The anticipated modest growth in 2026 necessitates a keen focus on group bookings, which are expected to be a critical factor in the year’s success.

Corporate and International Travel Dynamics

While there are positive signs in corporate travel and inbound international travel, these are not guaranteed to drive significant demand, according to McFarland. Large events like the World Cup are expected to boost demand, but the fundamental determinant will be group bookings. The U.S. hotel industry may not see the transient demand it seeks, making early bookings essential for rate control.

Harry Carr, Senior Vice President of Revenue Management at Pivot Hotels & Resorts, notes that first-quarter pacing is stable but not exceptional. Demand patterns for 2026 mirror those of the previous year, with short-term booking windows remaining prevalent. The focus is on securing long-lead bookings to stabilize rates.

Digital Strategies and AI Integration

Jenna Fishel, Chief Commercial Officer at First Hospitality, emphasizes the role of artificial intelligence in shaping hotel strategies. The introduction of a generative engine optimization (GEO) playbook aims to enhance hotel visibility in AI-driven search engines. This digital strategy is tiered to accommodate different hotel needs, offering a range of options from free to high-cost solutions.

Social media influencers and reputation management are also pivotal in influencing guest decisions, with GEO facilitating easier access to reviews and information. Fishel emphasizes selling experiences rather than just rates, enhancing the guest journey and conversion rates.

Opportunities and Challenges

The World Cup presents both opportunities and challenges, as it alters travel patterns across various markets. Carr notes that while events like Brazil’s match in Dallas can spike demand, they may also deter other travelers. Understanding these dynamics is crucial for optimizing hotel strategies.

In many World Cup markets, the abundance of hotel supply may limit the ability to command high rates. Fishel suggests that occupancy levels in urban markets necessitate a focus on average daily rate (ADR) strategies. Content strategies should emphasize experiences, such as wellness or culinary offerings, to attract guests.

Adapting to Uncertainty

The hotel industry must remain adaptable to unforeseen changes. Carr advocates proactive market testing to refine pricing strategies. Avoiding a “race to the bottom” in pricing is crucial to maintaining value.

Empowering revenue managers to make swift decisions without bureaucratic delays is essential, according to Fishel. McFarland advises against rigid annual strategies, recommending a flexible, data-driven approach to navigate the dynamic market landscape.

In conclusion, hotel revenue managers are preparing for a year of modest growth and uncertainty by focusing on group bookings, leveraging digital strategies, and maintaining flexibility in their approaches. The ability to adapt quickly to changing conditions will be key to success in 2026.

Discover more at CoStar.