Hotel performance across major U.S. markets continues to show that strong demand and high rates do not automatically translate into strong profitability. Labor remains a significant factor regarding profitability, with markets that keep labor expenses in check converting similar occupancy levels into materially stronger gross operating profit.
Hotel profits are increasingly dependent on market-level labor cost structures
Sun Belt and leisure markets are best able to convert demand into profit
CoStar Analytics
April 7, 2026 | 6:27 P.M.
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