Management companies are navigating resilient travel demand alongside rising costs, shifting guest expectations and an increasingly complex operating environment in 2026. Hotel Business spoke with Daniel del Olmo, president/CEO, Sage Hospitality Group; Thomas Luersen, president, Coraltree Hospitality; Scott Roby, president, Parable Hospitality; Mack Sims, principal/president, OTH Hotels Resorts; Dan Walworth, chief compliance and strategy officer, HEI Hotels and Resorts; and Scott Webb, president, Kolter Hospitality, to discuss how these dynamics are reshaping performance and strategy.
—Gregg Wallis
What are the biggest operational challenges you are facing today?
del Olmo: Labor and cost pressures remain defining operational realities for our industry. But the conversation has evolved beyond simply filling roles or managing labor hours. The real challenge is building sustainable, compelling careers that attract, develop and retain great people.
Hospitality is, at its core, a people business. When associates feel supported, empowered and connected to a clear sense of purpose, service improves and performance follows.
At the same time, operators must maintain creativity and quality while managing rising costs across the P&L. That requires disciplined operations, thoughtful design and a clear understanding of what truly creates value for the guest. Impression through design matters, but without genuine hospitality and human connection it does not have nearly the same impact.
Luersen: The most persistent operational challenge continues to center on people—specifically attracting, retaining and developing great talent in an industry where expectations have evolved significantly. Today’s workforce is looking for purpose, flexibility and clear growth opportunities, not just a paycheck. As leaders, we must meet those expectations in a genuine and sustainable way. This trend manifests itself in “all things about culture.”
At the same time, we are balancing leaner labor models with higher guest expectations. This requires being very intentional about how and where we deploy our teams, ensuring the right people are focused on the moments that matter most in the guest journey. Technology tools are increasingly effective in alleviating some behind the scenes duties, allowing greater focus on the guest experience. Retention today is driven by culture, leadership and connection to work, and we are investing heavily in leadership development and team engagement to build resilient, high performing organizations.
Roby: One of the biggest challenges we are facing continues to be labor. We’re still seeing persistent cost pressure, but at the same time, there’s a real need to retain strong culture and deliver a high level of service. Balancing cost control and people investment is an ongoing focus.
We’re also dealing with rising costs across virtually every line item, from goods and services to insurance and utilities. That’s forcing operators to be much more disciplined and intentional in how they run their businesses, with a sharper focus on how to operate efficiently without compromising the guest experience.
When it comes to distribution, the landscape is increasingly fragmented and maintaining rate integrity while also driving profitable demand has become more complex than ever. It requires a very strategic approach to channel management to make sure we’re not sacrificing long-term value for short-term gains.
Sims: The biggest challenge is protecting profitability while maintaining service standards. Hotels are navigating higher operating costs and ongoing labor constraints, both in terms of staffing and rising wages, while also dealing with increased expenses. The pressure is not just on finding talent, but on running more efficiently without weakening the guest experience.
That really comes down to balancing efficiency with guest experience. Teams need to be more thoughtful about how they deploy resources and more intentional about where service moments matter most, especially as guest expectations continue to rise.
Walworth: The hotel industry continues to face significant labor pressures across both hourly and supervisory roles. Attracting associates into open positions has become more challenging, while retaining existing team members has taken on even greater importance. For hourly roles in particular, the available candidate pool is shrinking, and expectations around scheduling flexibility have changed materially. Many applicants are increasingly drawn to other industries with comparable demands but greater perceived flexibility.
In response, we are adapting our approach. Our teams are encouraged to offer flexible scheduling wherever possible, while we continue to invest in tools, technology, benefit programs and cultural initiatives that make each hotel an employer of choice within its market. As part of that strategy, HEI has also expanded its investment in international recruiting programs. These programs have proven effective, though they require longer lead times in today’s environment.
Similar dynamics are playing out at the managerial level. In addition to the broader labor constraints, we are seeing less willingness among experienced, high-performing associates to relocate for new opportunities than in the past. Geographic mobility, once a defining characteristic of hospitality careers, has become more limited—particularly in roles with highly transferable skill sets such as sales, finance and human resources. These shifts are reshaping how we think about not only recruiting but talent development and succession planning as well.
Webb: Operationally, the industry continues to navigate elevated labor and cost pressures. While staffing levels have improved, retention and training remain constant priorities—especially as guest expectations rise. Insurance and utility costs present another major challenge, climbing at rates that far exceed historical norms. In addition, the international segment has yet to fully rebound. These headwinds require increased discipline in both forecasting and expense management, even as domestic demand remains robust.
What strategies are you using to drive revenue growth beyond room sales?
del Olmo: Hotels today have to think beyond the room as the primary source of value. The opportunity is to create vibrant, multi-dimensional spaces that generate energy and activity across the property throughout the day.
We are especially focused on placemaking across the entire ground-floor experience, ensuring mixed-use elements such as retail, office and residential feel fully integrated rather than treated as stand-alone components. Whether someone works, lives or visits there, the goal is to create a place that feels relevant and alive.
Food and beverage is a major driver, particularly when concepts resonate with both travelers and the local community. Well-executed restaurants, bars and social spaces can become destinations in their own right.
We also look closely at programming, partnerships and events that bring people into the property from morning through evening. When a hotel becomes a true gathering place for the community, it strengthens brand relevance and expands revenue opportunities well beyond traditional room demand.
Luersen: Our approach to revenue growth is increasingly centered on maximizing total revenue per guest, not just per room. That means looking holistically at the guest lifecycle and identifying opportunities to create value before arrival, during the stay and beyond checkout.
We are leveraging CRM and data driven marketing to better understand who our guests are, what they value and how they engage with our brands. This allows us to deliver more relevant, timely offers and to grow ancillary revenues through curated packages, upgrades and experiences that enhance the stay.
We are also focused on strengthening direct relationships with our guests and building long term loyalty. Over time, this not only improves profitability but also creates a more resilient business by reducing reliance on third party channels.
Roby: We’re really focused on expanding revenue beyond the room by thinking more holistically about the guest journey. It’s not just about occupancy anymore, it’s about how we create opportunities for engagement and incremental spend throughout the stay.
Beyond on-property amenities, a big part of our strategy is leaning into experience-driven revenue. Activities like private dinners, curated local excursions, olive oil tastings or chef-led events give guests something memorable while also creating impactful new revenue streams.
We’re also taking a closer look at how we use our spaces. Areas that may have been underutilized in the past are now being activated for things like family photography sessions, small gatherings and community-driven events, which adds both energy to the property and incremental revenue.
Strategic partnerships are another key piece. By working with local vendors and national brand partners, we’re able to create bookable, on-property experiences that feel authentic to the destination while also driving revenue. We’re being more intentional about how we package and present these offerings. Strong storytelling and thoughtful packaging can significantly increase perceived value and overall spend.
To increase incremental spend, we have added new executive chefs at both the corporate and property levels to elevate the dining experience throughout the portfolio. The newly enhanced culinary teams are refining and diversifying menus and creating limited time experiences to drive excitement and interest in our restaurants and bars.
Ultimately, the shift is toward focusing on total revenue per guest rather than just RevPAR, aligning all departments to contribute to a more comprehensive, experience-led revenue strategy.
Sims: The biggest opportunity today is to think about revenue more holistically. It is no longer just about filling rooms; it is about maximizing the total value of each guest and the entire commercial ecosystem. That includes food and beverage, catering, meetings and events, parking, amenities and other ancillary offerings that drive revenue performance.
Group and event business continues to be a strong driver, and when those guests are on property, there is a significant opportunity to curate experiences that feel relevant and compelling, including tailored dining, creative use of event spaces or unique activations that encourage additional spend while enhancing the guest experience.
Walworth: HEI has long focused on maximizing the profitability of every guest, but in today’s environment, that focus is more critical than ever. Driving revenue growth increasingly means looking beyond traditional room sales and rethinking how experiences are designed, priced and delivered across the hotel.
We’ve adapted our approach to banquets and catering to unlock new revenue opportunities. Rather than relying solely on traditional offerings—such as house versus premium spirits or standard coffee service—we’re introducing more distinctive, experience-driven options. Examples include partnering with local distilleries to create custom cocktails or engaging live baristas to deliver elevated coffee experiences. These offerings not only create memorable, social-media-worthy moments, but also meaningfully enhance revenue. A similar philosophy applies to our food and beverage outlets, where curated concepts and intentional marketing have helped differentiate venues, drive traffic and increase average check.
Webb: Well, we can’t share our secret sauce, but we have the best operation and commercial teams that are equally focused on the top and bottom line. We have regular, meaningful conversations with each and every hotel and together we identify trends and opportunities to capture additional revenue. We have the best hotels, the best teams that consistently deliver and we can drive rate as a result. This pricing strength gives us the ability to reinvest in high-impact areas such as lobby activation, marketplace retail and group event spaces. These initiatives transform underutilized areas into revenue-producing venues, create opportunities for local guest engagement and ultimately extend the value of every square foot. Whether through curated social events, enhanced beverage service or flexible work-and-meeting setups, our goal is to deepen guest interaction throughout the property, not just in the guestroom.
What trends will have the greatest impact on hotel operations over the next few years?
del Olmo: Experiential hospitality will continue to shape the future of our industry as guests increasingly seek places that reflect the culture and character of their surroundings.
Technology will also have a growing impact on how we operate and personalize the guest journey. But for us, technology should enhance hospitality, never replace it.
Finally, culture will become one of the most important competitive advantages in hospitality. Organizations that invest in their people, including reskilling and upskilling in response to AI, and create environments where associates can thrive will ultimately deliver the strongest guest experiences and the best long-term performance.
Luersen: Technology will have a meaningful impact on hotel operations over the next several years, but not by replacing hospitality. Instead, it will reshape how and where human interaction happens. At the same time, cost pressures, labor dynamics and owner expectations will continue to demand disciplined execution.
Roby: Looking ahead, we’re going to see continued integration of AI across the entire commercial operation from marketing and revenue management to day-to-day operations. It’s going to drive efficiency and smarter decision-making, but the real advantage will come from how operators apply it strategically. At the same time, there’s a clear shift toward experiential hospitality. Hotels are evolving into curators of place, not just providers of rooms, and that mindset is reshaping everything from programming to partnerships.Guest expectations are evolving as well, particularly around wellness and lifestyle. There’s growing interest in things like low- and no-alcohol offerings, more intentional travel, and experiences that support overall well-being.
Sims: Looking ahead, I think the biggest forces shaping hotel operations will be AI, labor transformation, personalization and continued cost pressure. We see a clear shift toward more advanced automation, better use of data and more integrated technologies that support both operational efficiency and the guest journey. AI, in particular, is going to play a meaningful role in how hotels analyze demand, personalize experiences and streamline day-to-day workflows.
At the same time, operators will need to become more sophisticated in managing demand segmentation and total profitability. Modest top-line growth alone will not be enough to offset rising expenses, so faster, streamlined decision-making and a broader commercial mindset will be key factors for success.
Walworth: Without a doubt, operators that successfully leverage AI to create value for owners will move well ahead of those that do not. At HEI, we’ve already begun harnessing AI’s potential across our organization, enabling our teams to respond to leads more quickly, strengthen recruiting efforts, reduce call volumes, organize and renegotiate contracts, and automate administrative tasks. Most importantly, these tools are helping our teams become better and more effective every day.
We also expect AI to play an increasingly dominant role in the booking landscape. Today, we’re actively focused on ensuring our hotels are properly positioned for AI’s growing influence in the research and discovery phase, where traveler behavior is already changing. At the same time, the technology is moving steadily closer to conversion, and over time AI-powered searches are likely to drive a greater share of direct bookings. Preparing for that shift now, rather than waiting for it to arrive, will be critical for operators.
Webb: AI, search, answer and agentic booking capabilities will be a game changer. Technology and automation will reshape hospitality more in the next couple years than in the prior 20. AI driven forecasting, smart labor optimization and personalized guest service tools will become central to both operational efficiency and competitive differentiation.
In South Florida, event driven tourism is poised to have an outsized impact. The market’s growing calendar—including global events like the FIFA World Cup 2026, major sports championships and expanding convention activity—is already influencing booking patterns and compression.
