The post-pandemic glory days of soaring ADR are in the past, and the mood at ALIS 2026 was one of pragmatic survival. As the industry gathered in Los Angeles for the Americas Lodging Investment Summit (ALIS), STR’s Vice President of Analytics Isaac Collazo, Kalibri Labs’ Chief Executive Officer Cindy Estis Green, and Phocuswright’s Senior Vice President of Content Mitra Sorrells delivered a clear message: the hotel industry has moved beyond a standard cyclical shift, entering a new reality where a “trifurcated” economy and the rapid ascent of AI are fundamentally rewriting the traditional playbook for hotels.
The session, moderated by Christoph McLaughlin, senior vice president of portfolio strategy at Ashford Inc., addressed the “simple math problem” currently keeping owners awake at night.
The 2026 Forecast: A “Math Problem” for Owners
The industry outlook is characterized by a “trifurcation”—growth at the luxury end, declines at the lower end, and flatness in the middle. Collazo presented a conservative forecast:
- RevPAR Growth: Projected at a meager 0.6 percent.
- Inflation vs. ADR: While ADR is expected to grow by only 1 percent, inflation is projected at 2.4 percent.
- The World Cup Factor: 2026 performance is heavily reliant on the FIFA World Cup. Without the 10 host markets, industry RevPAR would likely be negative.
Estis Green offered a year-over-year RevPAR adjustment of -1.5 percent to +1 percent, noting that while corporate and group business remain stable, discounted categories (OTA, loyalty, government) are dragging down the average. If forced to “make the pick” today, she said she would land at -1 percent.
“Demand is growing zero to 3 percent for the next few years, and expenses growing five to 10%… that’s a simple math problem,” she said. In an environment where operating costs and labor are ballooning far faster than revenue, she argued that “top-line” growth is no longer the metric of success; the focus must shift entirely to net revenue and operational efficiency through automation.
Collazo specifically highlighted that the 2026 forecast “moves from red to black” compared to 2025, but it is “not getting great.” He noted luxury properties are projected to grow 3.2 percent, while limited-service, midscale, and economy segments are all expected to be negative, ranging from -1 percent to -2 percent.
Supply and Demand: The Rise of Alternatives
A significant takeaway was the “decoupling” of hotel demand from GDP. While the economy grew in 2025, hotels lost RevPAR. The panel identified major culprits:
- Short-Term Rentals (STRs): In 2025, total accommodation demand grew by 6 million nights, but hotel-specific demand was down. All net gains were captured by short-term rentals.
- The Cruise Industry: Cruises are increasingly siphoning off traditional hotel guests.
- Supply Trends: New construction remains below the 20-year average due to financing costs, but conversions have hit a 10-year high.
“This is probably the most difficult forecasting environment of my 30-something years in this industry… every day something new happens that we never thought of,” Collazo said. His admission of the “chaos and change” in the marketplace underscores why 2026 is such a pivotal year. Between the trifurcation of chain scales and the unexpected decoupling of hotel demand from GDP, traditional historical models are no longer reliable.
The AI Revolution: Beyond the Hype
The panel noted that AI has moved from a “future concept” to a current operational necessity.
- Search Behavior: Traditional search (primarily Google) is losing ground. Data shows a sharp drop in traditional search starting in early 2025, with travelers shifting to GenAI tools like ChatGPT and Gemini for trip planning.
- Visibility is the New SEO: Sorrells warned that hotels are no longer just competing for Google rankings but for “AI recommendations.” If a hotel’s specific amenities (like a high-end gym) aren’t surfaced in a natural language query, that property effectively doesn’t exist to the modern traveler.
- Operational ROI: AI’s immediate value lies in “back-of-house” efficiencies—right-sizing staffing, automating check-ins, and optimizing marketing spend to combat rising labor costs.
While the revenue outlook is muted, Estis Green sees a “huge opportunity” in using AI to solve the labor crisis. She advocated for a total rethink of property staffing, suggesting that AI models can now show whether a property would be better off trading a traditional corporate sales role for increased digital media spend or automated housekeeping schedules.
Shifting Consumer Loyalty
The panel also debated the value of brand affiliation. Phocuswright research indicates that Gen Z and Millennials prioritize novelty over loyalty. Also of note: Only 38 percent of younger travelers belong to loyalty programs, compared to over 50percent of Boomers. Sorrells’ data also shows that 47 percent of Gen Z travelers explicitly state they would choose a new travel experience over a brand they have used before. Estis Green countered by noting that loyalty programs act as a “higher floor” for brand.com sites, providing 60 percent contribution and keeping direct bookings stronger than OTAs, making them a “demand advantage” rather than “demand insurance.”
On the Growing Power of AI Platforms
Sorrells highlighted a seismic shift in how travelers plan trips. With traditional search engine usage dropping sharply in favor of GenAI tools, a hotel’s survival depends on whether its specific amenities—like specialized gym equipment or boutique services—are “crawlable” and digestible for AI recommendation engines.
“The implication is clear: you’re not just competing on visibility on Google,” Sorrells noted. “You are competing to be recommended by AI.”
It’s a new day, so to speak, and Estis Green’s blunt assessment of the current economic climate summed it up well: “The skies are falling—I don’t believe that. But really, we need to change our behavior and how we’re analyzing everything.”
2026 Projection / Trend
- RevPAR: 0.6 percent (Heavily World Cup dependent)
- ADR vs. Inflation: 1.0 percent ADR vs. 2.4 percent inflation (Pressure on margins)
- Supply: Low new builds; high conversion activity. Supply 19 percent of pipeline under construction; high conversion focus.
- Consumer: Wealthier, frequent travelers moving to AI tools
- Main Threat: Short-term rentals and margin erosion via labor/inflation
- Search Habits: 40 percent of U.S. travelers now use GenAI for planning
- Demand: Shift toward wealthy travelers and Small-to-medium business
