Hoteliers entering 2026 are hopeful for a better year than 2025, but with a new year comes new challenges.
With that in mind, CoStar News Hotels recently took a look at some of the major issues and topics for the industry. Here are some of the takeaways.
Supply chain issues and cost creep are having impacts on hotel design, and one way this is expected to manifest in the new year is a shift in how hoteliers approach the concept of luxury. And this shift isn't just driven by costs, as luxury guests see value in a more authentic, grounded form of luxury.
"When you're visiting a hotel or a destination, you really want to be of that place, right? And you want to create an environment that is unique to that destination," Scott LaMont, CEO of EDSA — a design firm focused on planning, landscape architecture, and urban design — said. "One of the ways we can accomplish that is by bringing the materials that are from that region or from that area."
Experts described this trend as "quiet luxury" with Kevin Warwick, vice president of design and construction at Vision Hospitality Group noting "good design doesn't have to be expensive — it has to be thoughtful."
Much like designers, revenue managers are also seeing a shift in the new year, with many putting more of a priority on building out a solid base of group business in order to drive rate on transient.
“We're telling our sales teams, ‘Go out there, get in front of it, get that base on the books early, solicit early and often for that group business,’” said Leah McFarland, senior vice president of revenue strategy at Crestline Hotels & Resorts.
For many markets in North America, the biggest difference between 2025 and 2026 is likely to be the World Cup, but it's still unclear how that will all play out.
“Are we going to see an uptick to maybe the secondary markets that aren’t affected?” Harry Carr, senior vice president of revenue management at Pivot Hotels & Resorts, said. “Will we see a pop in Charleston because people are fleeing Atlanta? We’re working a lot on that to make sure that we understand how it will disrupt the overall summer. Even corporate and group might avoid a city over what’s going on.”
In many destinations around the globe, preserving natural beauty remains a top priority, and that's especially true at places like the Black Sand Hotel in the Ölfus region of Iceland.
As a nation, tourism is a big economic driver for Iceland, so finding the right balance of drawing in travelers with maintaining its allure as a destination is key.
“This is a truly unique setting, and we have the ability to create a memory. To hear the wows fuels what we do. There is the solitude, and being meters from the ocean, we have the calm. Guests can disconnect,” General Manager Óskar Vignisson said.
On the development and financing side, many investors have been watching how central banks — most notably the U.S. Federal Reserve — have been approaching interest rates of late, but Peachtree Group's head of originations and C-PACE Jared Schlosser said waiting out interest rates won't be the winning strategy for getting deals done and making projects pencil.
"When I send out a term sheet, the No. 1 thing that's negotiated these days is the rate floor because so many people have heard rates are going to get cut," he said. "People ignore things that are way more important than a rate floor, and they go straight to a rate floor. That just leads me to believe there's a lot of conversation out there that rates are just magically going to drop 100 or 200 basis points.
"Maybe they do," he continued. "I have no way to predict the future, but we've been saying this for the last few years, and they're relatively around the same rate as they've been since the large increase of [2022]."