- Trepp: $18.7B in hotel CMBS debt matures in 2026.
- HotelData: Labor cost POR rose 1.8 percent in Q1.
- Hotels expected to pay nearly $131 billion in wages and benefits for 2026.
HOTEL OWNERS FACE a refinancing test in 2026 as rising labor costs squeeze property cash flow just as $18.7 billion in hotel commercial mortgage backed securities debt comes due. Trepp data cited by law firm FBT Gibbons show 596 hotel-backed loans maturing this year.
Nearly 70 percent of that balance carries floating-rate terms, according to Trepp. The figure covers hotel CMBS debt specifically, rather than all hotel debt outstanding.
FBT Gibbons said the cohort includes floating-rate loans, many with extension options, and fixed-rate loans with coupons below 6 percent and no option to extend. The issue for owners is not simply the amount of debt maturing but whether a property's cash flow can support replacement financing at current rates.
Labor costs pressure cash flow
The American Hotel & Lodging Association's 2026 State of the Industry report said hotels paid nearly $128 billion in wages and benefits in 2025 and projected nearly $131 billion for 2026. AHLA said rising operating expenses were a primary factor keeping gross operating profit per available room at roughly 90 percent of 2019 levels.
Photo credit: AHLA
That makes labor relevant to refinancing because revenue does not flow directly to NOI. As FBT Gibbons' analysis makes clear, lenders are ultimately assessing whether a property's operating performance can support the replacement loan. A hotel must absorb labor and other operating expenses before cash is available to support debt.
HotelData's first-quarter 2026 report, based on about 5,000 hotels, found labor cost per occupied room rose 1.8 percent year over year, from $45.96 to $46.79. Hours per occupied room declined 2.3 percent. HotelData said productivity gains helped protect margins, but wage pressure remained.
AHLA's Front Desk Feedback survey of 246 hoteliers, conducted in late February 2026, found 65 percent citing labor costs as a financial pressure and 42 percent citing workforce shortages. Half said their properties were somewhat understaffed and 5 percent said they were severely understaffed. Seventy percent said they were paying higher wages to recruit and retain employees.
FBT Gibbons said hotel loans originated in 2016 or 2021 may carry rates of 4 percent to 6 percent, while a new 2026 loan may come at 6 percent to 7 percent. The firm said owners may need to contribute more equity or sell if projected performance cannot support the higher rate.
That creates a potential gap even for hotels that remain profitable. If labor costs reduce NOI, the property may support less debt. If replacement financing also costs more, the gap between the maturing loan and available new debt can widen.
Productivity matters for refinancing
Photo credit: iStock
This changes how investors should assess hotel performance. Occupancy, ADR and RevPAR remain important measures of demand and revenue, but they do not show how efficiently a property converts revenue into NOI. Labor cost per occupied room and hours per occupied room provide another measure of that conversion.
PwC's May 2026 U.S. Hospitality Directions projected RevPAR to grow 2.9 percent in 2026, after a 0.2 percent decline in 2025. It projected demand growth of 3.2 percent, ahead of 2.3 percent supply growth.
That demand outlook provides support, but it does not remove labor pressure. HotelData found housekeeping productivity improved in the first quarter, while overtime increased across key housekeeping roles. It said the pattern suggests teams worked more efficiently but still needed a flex buffer.
Asian Hospitality's coverage of the report said housekeeping hours per occupied room improved 3.6 percent, guest services improved 1.9 percent and management improved 2.4 percent. Average headcount declined 1.2 percent in full-service hotels and 1.4 percent in select-service hotels.
The numbers show why productivity is becoming part of the refinancing case. Operators are using fewer hours in some functions, but rising overtime shows there is a limit to how far hours can fall without creating costs elsewhere. The relevant measure is whether a hotel can reduce labor intensity while maintaining service and the revenue needed to support the property.
For owners, investors and developers, FBT Gibbons' refinancing analysis and HotelData's labor data suggest that sustainable NOI matters more than revenue growth alone as debt matures. Labor intensity should be considered alongside RevPAR, leverage and debt service because two hotels with similar revenue can have different refinancing exposure if their labor models produce different margins. For developers, labor requirements also form part of the long-term operating model and can affect margins, NOI and debt capacity.
