It's difficult to make a plan when it's likely that plan will be upended.
Learning from their experiences last year, hotel revenue and commercial strategy executives are preparing themselves for more uncertainty.
The expectation is that 2026 will be another year of modest growth, and the story may not be the same from one city to another, said Leah McFarland, senior vice president of revenue strategy at Crestline Hotels & Resorts.
“We’re going to have to be very micro-focused on strategy, particularly rate strategy, from one market to the next,” she said.
There are some positive signs from corporate travel and international inbound, but they’re not necessarily slam dunks, McFarland said. The upcoming World Cup matches and other large events are going to help, but group demand is going to make or break 2026, she added.
“For us, it is a year where we can't stress the importance of group base enough,” she said. “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.’”
Even if corporate and international inbound demand returns, the U.S. hotel industry isn’t going to see transient demand where it would like to see it, McFarland said. Hoteliers should hedge their bets and get business on the books early to give themselves the opportunity to be in the driver’s seat for rate.
“We’re going to be talking a lot about getting [average daily rate] when you can, because there’s going to be a lot of times that you can’t,” she said. “This is not going to be an overly compressed year with excess demand to enable us to really push rate.”
First-quarter pacing has been OK but nothing crazy, said Harry Carr, senior vice president of revenue management at Pivot Hotels & Resorts, the lifestyle hotel operating vehicle of Davidson Hospitality Group. Overall, the demand patterns for 2026 are lining up similar to last year. The group booking window and small corporate group booking window are still short-term.
“We try to do this every year, but we’re trying to hit that long lead booking window and really focusing on getting base on the books,” he said. “Not to say that we can always maximize in the short-term, but if we do get that same short-term demand, that’s how we can drive a little bit of rate.”
Corporate travel has been a little static, and the U.S. government-related demand affected by the shutdown hasn’t rebounded as much as hoped, Carr said.
“This is probably our slowest corporate booking period in December, and that is usually short term,” he said. “We’re trying to really focus on the local markets in general, trying to build those relationships in the backyard accounts.”
One of the bigger things that First Hospitality set up for 2026 is leaning into artificial intelligence and rolling out a generative engine optimization playbook to hotels, Chief Commercial Officer Jenna Fishel said. GEO is a digital strategy to increase visibility in AI-powered search engines.
The playbook tells the hotel teams what they can do to affect GEO, broken out into different tiers because each hotel is different, she said. There are free options, low-cost options and higher-cost options, and this provides guidance on their individual strategies.
“We want to make sure to arm our property teams with training and resources, helping hotels understand what is happening in that space, how they can impact it, so they can stay ahead and maximize hotel visibility,” she said.
Social media influencers will continue to evolve and have more of an impact on the guest journey and improve conversion, Fishel said. Reputation management will also be a factor, especially with GEO because it will look at review sites and put those decisions in front of travelers easier than before.
“They don’t have to check multiple websites. It’s all going to be at their fingertips,” she said.
Opportunities and challenges
When it comes to World Cup demand, Pivot Hotels is looking at all of its markets because the matches will change overall travel patterns, Carr said. When Brazil plays in Dallas, it will be amazing for hotel demand in the market, but that could also mean other travelers may try to avoid the craziness that comes with the games.
“Are we going to see an uptick to maybe the secondary markets that aren’t affected?” he asked. “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 World Cup markets, there’s so much supply that unless a hotel is right by the scheduled match, it may not be able to see “extraordinary rates,” Fishel said. In many of its top markets, the convention calendars may bring in more room nights, but they’re not peak events, so it’s going to be more difficult to drive hotel ADR.
“Occupancy is already there in a lot of these urban or top 25 markets in a high season, so ADR has to be the focus, and it is not going to come organically. There has to be a strategy around day, week and season, and then we’re going to have to optimize our online presence to be the guests’ first choice,” she said.
One approach First Hospitality is taking is focusing in its content strategies is selling an experience, not just putting a rate plan out there, Fishel said. It focuses on what the guest can do, not just what they get.
“If it’s a spa and wellness opportunity, you want to make sure to sell the experience,” she said. “You’re going to feel rejuvenated. If there’s a food-and-beverage credit, they’re going to feel nourished after a good meal. You’re not just advertising a $25 food-and-beverage credit but really selling the experience.”
There’s so much uncertainty that the things that can be a positive can also be a negative, McFarland said. The federal government shutdown ended in November, but the government is only funded through the end of January.
“If things go awry again, that could put a major hole in 2026,” she said. “That’s something we’re all really nervous about and really watching closely.”
Hotel supply is always a question no matter what demand does, she said. Things are starting to move, and transactions are picking up. There are some major cities with a robust development pipeline, and as those hotels come online, it’ll be interesting to see how that affects the overall demand curve.
The international inbound piece is a headscratcher, McFarland said. While the expectation is the World Cup will lead to an increase, it remains a question how U.S. sentiment will play into demand. The U.S. saw how that affected inbound demand in 2025, especially from Canadian travelers, and the uncertainty makes it difficult to plan.
“It's going to make it a very challenging leisure travel season in particular for those operators like us that have some destination hotels that have supply in major leisure markets for that international travel,” she said. “That's really making us a little bit nervous, because we just don't know what's going to happen, and quite honestly, we're not going to know until real short term again, and that's making it challenging to manage a strategy.”
Adapting to surprises
No year goes according to plan, so having the ability to adjust to change is a key part of any company’s strategy.
Testing the market is extremely important, Carr said.
“I don’t want to say constant changes, but when you’re looking at your pricing, testing a week where you’re a little bit higher price point, a little bit lower a price point — being much more proactive is one of the things that we like to do,” he said.
Having a set strategy for the entire season results in being too reactive and falling behind in the market, he said.
There’s a slightly larger risk of overall rate decline in the industry, and Pivot has done well holding onto its value position, Carr said.
“There is a tendency to panic a little bit and have that race to the bottom that feeds on itself,” he said. “So, we really try to avoid that and make sure that we're not feeding into that loss of value.”
Giving revenue managers the freedom and flexibility to make changes as needed without an overly bureaucratic process is key, Fishel said. That’s especially true when talking about having to make a short-term, in the week for the week change.
“Empowerment for the revenue managers,” she said.
The trick is being nimble and not too set in the strategy, McFarland said. Everyone has come off doing their budgets and set their forecasts for the coming year, and it’s easy to say what’s going to happen and how the year will go and how the company will respond.
“But you really can’t do that in this industry, especially in this climate,” she said. “You have to continue to look at things on a month-to-month, week-to-week basis.”
Crestline wrote its budget in the fourth quarter of 2024 and then “we basically lit them on fire in February,” she said.
The hope is that 2026 isn’t a repeat of last year, but hoteliers have to behave like it might, she said. That means watching the data, watching the pricing and being mindful of what’s in the news. Hoteliers have to be plugged into so many things in addition to the data to drive the micro strategies that produce results.
“We can’t set a plan for the year and then just walk away and let that plan unfold,” she said. “That just doesn’t work in this scenario.”