Summary:
- U.S. hotels adjusted labor models to offset rising costs, according to HotelData.com.
- Wages, labor cost per occupied room and headcount all rose in 2025.
- Operators maintained margins by reducing hours per occupied room.
U.S. HOTELS ARE adjusting labor models to offset rising wages, operating costs and revenue that fell short of expectations this year, according to HotelData.com. Hotel operators preserve margins by cutting hours per occupied room and boosting labor efficiency.
HotelData.com’s “2025 Hotel Labor Costs & Trends” report found that wages increased up to 5.9 percent, labor cost per occupied room rose 2 to 11.2 percent and headcount grew 4 to 9 percent.
Hours per occupied room fell 7 to 15 percent in guest services, housekeeping and management from January to September, while productivity rose across frontline and leadership roles.
Meanwhile, hotels had set room-revenue budgets to grow 14.1 percent year over year in the first nine months, even as ADR was expected to decline 1.9 to 2.4 percent.
“Labor defined hotel performance more than any other cost category in 2025,” said Sarah McCay Tams, Actabl’s head of research. “Operators entered the year expecting strong revenue, but softer top-line results and rising labor costs required a new level of discipline. What stands out is how hotels improved productivity without cutting teams, instead using forecasting, cross-training and more precise scheduling to protect margins. Labor efficiency is now as important as rate strategy. In 2026, the hotels that outperform will be those that align labor with demand and deploy staff dynamically.”
The results show how hotels maintain profitability through higher labor productivity, better forecasting and staffing aligned with demand. The report uses aggregated data from thousands of U.S. hotels on Actabl’s operational and financial platforms.
Key findings
Guest services hours per occupied room fell 13.5 percent from January to September, housekeeping 7.1 percent and management 14.6 percent, the report said. Position-level productivity improved: room attendants worked 5.5 percent faster, guest service representatives 12.7 percent faster and AGMs and GMs about 14 percent faster, with MPOR down 9 percent overall.
Wages rose 3.7 to 5.9 percent and labor cost per occupied room increased 2 to 11 percent. Operators maintained staffing levels, using overtime strategically rather than reducing headcount.
Labor intensity varied by hotel type: extended-stay hotels averaged 1.30 hours per occupied room, select-service 1.44, full-service 2.57 and resorts 4.48. These differences highlight the need for hotel-specific forecasting and staffing models in 2026.
HotelData.com’s recent report, “Hotel Profitability Performance Report for Q3 2025”, showed operators adjusting forecasts, managing labor and costs and protecting margins as demand softened and expenses rose. The report also highlighted an industry shift, with hoteliers relying less on rate growth and more on cost control, labor strategies and forecasting to sustain profitability.
Looking ahead
Hotels should focus on three areas in 2026. First, forecasting must tie directly to labor. Small errors can misalign staffing with demand, so labor planning should link to booking pace rather than static payroll budgets, the report said.
Second, efficiency matters more than cuts. With wages and labor costs rising, hotels should maintain and extend the 5 to 15 percent productivity gains achieved in 2025 instead of reducing headcount. Tools connecting labor data with forecasts, scheduling rules and profitability targets will be critical.
Third, service models will continue to evolve, the report said. Refinements in stayover cleaning, mobile guest interaction and streamlined F&B will help reduce wasted hours while maintaining guest satisfaction and rate integrity, particularly in departments with the highest labor costs.
A recent Marriott International survey found that about 91 percent of Americans plan to travel in 2026, with 49 percent intending to travel more than in 2025. Around 67 percent say they will prioritize experiences like travel over material purchases.
