PERSPECTIVE
In Defense
HOTEL GOP IS UNDER PRESSURE— HOW OWNERS CAN PUSH BACK IN 2026.
By JOHN PAULSEN and SEBASTIAN VILLA, HOTELAVE
The hotel industry is shifting from offense to defense and the goal is protecting margin.
By the end of 2025, the U. S. hotel industry had shifted decisively from postpandemic recovery to a period defined by margin defense. What began as cautious optimism early in the year gave way to a need for recalibration as key performance indicators fell short of expectations. Demand stabilized, but expense growth, particularly labor, insurance and fixed operating standards, continued to outpace revenue gains, compressing gross operating profit( GOP) across nearly all segments. While most segments are feeling the squeeze, full-service, extended stay, and multi-F & B outlet hotels are feeling the impact more broadly.
Now into 2026, owners can no longer rely on ADR growth alone to protect profitability. Disciplined cost governance and active asset management have become essential to preserving value. The most successful owners will treat near-term margin defense and medium-term strategic investment as complementary priorities: maintaining guest experience and brand equity while deploying targeted initiatives in labor productivity, procurement, energy efficiency, revenue-margin optimization and technology consolidation.
MARGIN STORY 2025— A RESET, NOT A BLIP Industry expectations entering 2025 called for modest but steady growth. By year end, the picture looked very different.
Three forces drove the gap between projections and reality:
36 hotelsmag. com Mar / Apr 2026