In Brief: The US hospitality and leisure sector in 2026 is seeing a shift in dealmaking, with fewer but larger transactions focused on premium assets, wellness integration, and digital gaming, while AI readiness and generational demand segmentation play increasingly important roles in investment decisions.
Market Overview: Fewer Deals, Higher Premiums
According to PwC’s Hospitality and Leisure: US Deals 2026 midyear outlook, deal activity in the US hospitality and leisure sector has slowed in 2026, with overall deal volume down by approximately 2.5% over the past six months compared to the previous period. However, the deals that are occurring are concentrated in premium segments such as luxury hotels, wellness resorts, and gaming platforms. These assets are commanding higher premiums due to their pricing power, repeat customer engagement, and readiness for artificial intelligence (AI) integration.
The concentration of deals in upscale, upper-upscale, and luxury hotels has reached 73% of all hotel transactions—the highest in two years. This focus aligns with expectations for increased revenue per available room (RevPAR), with luxury segments projected to see a 5.4% rise in 2026. The total value of deals has also grown, driven by two major casino transactions in late May and early June. Even excluding these, deal value is up nearly fourfold, indicating a strong appetite for transformative mergers and acquisitions (M&A) among select assets.
Key Trends: Wellness, Gaming, and AI Integration
Several trends are shaping the current deal landscape:
– Wellness Integration: Wellness is no longer just an amenity but a core part of asset value. Buyers are paying premiums for properties where wellness is embedded throughout the guest experience, rather than added as an afterthought.
– Gaming Sector Activity: The gaming industry is experiencing renewed M&A interest, particularly in digital gaming platforms, loyalty ecosystems, and omnichannel customer relationships. Recent transactions highlight a shift in value creation from traditional casino operations to digital assets and customer data.
– AI and Data Readiness: AI capabilities, loyalty programs, and access to first-party customer data are now essential for operators. Companies lacking in these areas are seeing lower bids or withdrawn offers, while those with robust data and AI-enabled operations are attracting higher valuations.
Changing Investment Approaches
Investors are moving away from broad sector exposure in favor of targeted investments in premium assets. The sector is no longer treated as a single asset class, with capital flowing toward the upper end of the market. New construction remains challenging due to high costs and longer timelines, making acquisition and repositioning of existing premium assets the preferred strategy.
Much of the current deal activity is driven by capital structure issues rather than operational distress. Recapitalization opportunities are emerging, where investors acquire assets with sound operations but strained balance sheets at lower valuations.
Generational Shifts and Demand Fragmentation
Consumer demand is fragmenting by generation and spending patterns. Younger travelers, such as Gen Z and millennials, are taking more trips but often opt for shorter stays. Gen X tends to focus on fewer but higher-value trips, while Gen Alpha is already influencing family travel decisions. Rising airfares are also pushing more travelers toward destinations within driving distance. Platforms that can appeal to multiple generations and offer personalized experiences are performing better in the current environment.
Outlook for the Next Six Months
Several areas are expected to shape the sector in the near term:
– Hotels: Investment will continue in upscale and luxury properties, especially those offering unique experiences in less saturated markets.
– Gaming: Further deal activity is expected, with a focus on digital platforms, loyalty programs, and prediction markets.
– Travel Technology: Platforms that improve revenue management, operations, and customer data through AI are likely to attract investment.
– Recapitalizations: More deals will involve recapitalizing assets with strong operations but weak balance sheets, particularly in the middle-market lodging segment.
– Consumer Segmentation: Investors will increasingly underwrite deals based on generational and behavioral segmentation rather than aggregate demand.
Conclusion: Strategic Focus on Data and Experience
The hospitality and leisure sector is entering a phase where competitive advantage will depend on the ability to convert premium exposure into pricing power and repeat business. Data, loyalty programs, and the overall consumer experience are becoming as important as the physical asset itself. Successful dealmakers will be those who leverage these advantages to drive direct bookings and long-term growth, while avoiding overpayment for legacy operations.
