First published on CoStar – view original
As we approach 2026, what will be different? We’ll focus on ancillary revenues, marketing technology, wellness, and talent. Perhaps the single most important competitive advantage is talent. Yes, technology is critical, and location, brand, and overall management still count, but it is the team that identifies and keeps talent that will win. And that talent will have to communicate well, analyze data effectively, and be both finance- and tech-savvy to optimize the team’s talent.
How to Attract Talent Today
There are several ways to attract talent. The first is to ensure a strong benefits program, flexibility, and a laser focus on your culture. People crave flexibility today, and a strong benefits package compared to your comp set speaks volumes to today’s employees. Culture might be intangible, but ask an employee and they will tell you what your culture is like!
To hit a home run with talent attraction, monitor your reputation as much as you monitor guest reviews and start looking for top talent to recruit. These are the people who require a plan for future growth and want the complete package of goodies discussed above.
Ancillary Revenue
Sure, 2026 might bring revenue streams from international travel, more government and military travel, and more group and corporate demand, but it might not move the needle enough to outpace supply growth. CBRE analyzed revenue trends in Food and Beverage (F&B) and found that per-occupied-room (POR) revenue increased by 3.8% in the first half of 2025. Increases were powerful in the resort sector. Another trend that emerged was referred to as mindful drinking, with low-alcohol and mocktails leading the growth.
In the past, most of us, as operators, used discounting to drive F&B revenue with Happy Hour and specials. Today, smart operators are offering new concepts, strong reputation management, superior service, and high-quality ingredients. Refurbished physical spaces, data-driven menu decisions, high-quality culinary programs, and greater F&B focus have enabled higher prices. Today, it is easy to analyze your menus, wine lists, beer, cocktail, and mocktail offerings. And AI can assist with providing suggestions for change!
Wellness – is this important to employees and guests alike?
Yes! Employees love an employer who cares about their health. And guests care about their ability to sleep comfortably. That means blackout shades, working temperature controls, and quiet rooms. When we get to the luxury traveler, they want spas, sleep treatments, elevated fitness offerings, and more. These are the offerings that drive average rates and ancillary revenues. Even a newly expanded or refurbished fitness center can add value! Add in healthy, nutritious foods, and you have a wellness improvement plan!
Corporate and Group Travel
Corporate and group travel were the leaders of the hotel industry in the past. Today, exacerbated by the 2020 and 2021 lockdowns, leisure drives 55% of the U.S. lodging business. Corporate demand has been growing very slowly, and group travel demand has peaked after a strong rebound in 2023 and 2024. According to Mark Lomanno, co-founder of Kalibri Labs, “leisure travel remains the dominant driver of occupancy, despite seasonality and price sensitivity.”
Marketing Strategy: From Digital to Agentic
Today, a thorough integration of social media, storytelling, and guest review management is paramount to marketing success. Deep integration of AI into your revenue management helps identify guest booking patterns, behaviors, and trends in ancillary spending. According to AI Guru Michael Goldrich of Vivander Advisors LLC, we are now past Web3 and into Web4. Web4 provides for intelligent agents that make decisions, transact, and negotiate on behalf of the user. Goldrich says, “The future of commerce will be driven by machines reading and acting on data. If your hotel’s pricing is not accessible to algorithms, if your inventory isn’t published in a format that agents can interpret…then your property effectively doesn’t exist.” These AI agents are already in use, and nearly 50% of travelers today are relying on AI for trip planning. These shifts are moving us from a digital strategy to an agentic strategy. I know, we just got comfortable with digital, and now we have to move on? Yes! Well, the Holiday Season is here so enjoy it and have a Happy New Year!
