Hotels pivot to profit discipline as revenue underperforms

Operators sharpen forecasting and cost control to protect margins

U.S. hotels entered 2025 with strong revenue expectations, but softer demand and rising costs pushed RevPAR below budget. Despite this, properties protected profitability through tighter forecasting, labor alignment, and strict cost management. The latest Actabl report shows an industry shifting from rate-driven growth to disciplined operational strategies.

Key takeaways

• Revenue fell short of budget: RevPAR averaged 9% below expectations, with softer ADR, weaker summer compression, and slower group and corporate recovery.
• Margins held steady despite topline pressure: GOP margin reached 37.7%, only 1.2 points under budget, supported by sharper labor controls and more frequent forecasting.
• Operational discipline strengthened: Hotels leaned on cost containment, staffing alignment, and improved mid-year forecasting to offset declining rooms revenue.
• Segment and market differences emerged: Upper midscale and upscale hotels led in GOP performance, while Hawaii, California, New York, and D.C. outperformed national RevPAR averages.
• Dynamic planning becomes essential for 2026: Operators are expected to move from static budgets to real-time forecasting, prioritizing contribution margin, labor-flex models, and accuracy as core success metrics.

Ge the full report at Hotel Data by actabl