ALIS 2026 was a place of survival and pragmatic thinking. The Americas Lodging Investment Summit was held in Los Angeles. STR Vice President Isaac Collazo and Kalibri Labs Chief Executive Officer Cindy Estis Green and Phocuswright Senior Vice President Mitra Sorrells all delivered a message that the hotel industry had moved past a normal cyclical change and entered a new world where a trifurcated economy and AI’s rapid rise are fundamentally rewriting traditional strategies for hotels.
This session was moderated by Christoph McLaughlin Senior Vice President of Portfolio Strategy at Ashford Inc. and addressed “the simple math problem” that keeps owners up at night.
This year’s forecast is 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 made a conservative prediction:
- RevPAR GrowthProjected to be a paltry 0.6 percent.
- ADR vs. InflationThe inflation rate is estimated at 2,4 percent.
- World Cup FactorThe performance of 2026 is highly dependent on the FIFA World Cup. The industry’s RevPAR is likely to be negative without the 10 host countries.
Estis Green estimates that RevPAR will be adjusted by a range of -1,5% to +1,5% in the next year. She noted that, while business for corporates and groups is stable, discount categories (OTAs, loyalty programs, government contracts) drag down average. She said that if she had to choose today between a -1 and a +1 percent, it would be based on the discounted categories (OTAs, loyalty programs, government).
She said: “Demand will grow between zero and three percent over the next couple of years while expenses are expected to increase by five to ten %…. It’s just a math problem.” She argues that in an environment where labor costs and operating expenses are rising faster than revenues, “top line” growth should no longer be the measure of success. The focus needs to shift from top-line revenue to operational efficiency and net revenue through automation.
Collazo highlighted the fact that 2026’s forecast is expected to “move from red to dark” in comparison to 2025. However, it will still be “not great”. Luxury properties, limited service, midscale and economy are predicted to all have negative growth, with a range of -1 to -2 per cent.
Alternatives to Supply and Demand
The “decoupling of demand for hotels from GDP” was a significant finding. In 2025 the economy was growing, but hotels were losing RevPAR. Panel identified the major causes:
- Short-Term Rentals (STRs)The total demand for accommodation will grow by six million nights in 2025. However, the demand specific to hotels is expected to decline. Short-term rental accounted for all net gains.
- Cruise IndustryThe cruise industry is stealing away more and more hotel customers.
- The Supply TrendsDue to high financing costs, new construction is still below 20-years average. However, conversions are at a 10 year high.
Collazo stated, “This probably is the most challenging forecasting environment in my 30+ years of experience… Every day we are surprised by something that has never happened before.” Collazo’s admission that the market is “chaos” and changing underscores the importance of 2026. The traditional models of the past are not reliable due to the decoupling between hotel demand and GDP as a result of the unanticipated trifurcation in chain scales.
AI Revolution – Beyond the Hype
Panelists noted that AI is no longer a futuristic concept, but a necessity for today’s operations.
- Search BehaviorGoogle is losing its dominance in traditional search. The data shows that traditional search will drop sharply in 2025 as travelers begin to use GenAI tools such as ChatGPT or Gemini.
- The New SEO is VisibilitySorrells warns that modern travelers are less interested in Google ranking than they are “AI recommendations” – if a property’s amenities, such as a luxury gym, are not surfaced by a query using natural language.
- Operating 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.
Estis Green believes that AI can be used to help solve the current labor shortage. She called for a complete rethinking of the property staffing. AI models could now tell if a property is better off with a corporate sales position or a more automated schedule for housekeeping.
Shifting Consumer Loyalty
Panelists also discussed the importance of brand loyalty. According to Phocuswright’s research, Gen Z and Millennials place more importance on novelty than loyalty. Note that only 38percent of young travelers are members of loyalty programs as opposed to more than 50percent Boomers. Sorrells data shows that 47% of Gen Z travellers explicitly say they’d choose a different travel brand over one they already use. Estis Green responded by pointing out that brand.com’s loyalty program acts as a higher floor, contributing 60 percent and keeping direct bookings strong than OTAs. This makes them a demand advantage rather than a “demand insurance.”
The Growing Power of AI Platforms
Sorrells emphasized a fundamental shift in the way travelers plan their trips. GenAI is replacing traditional search engines, and hotels are now relying on their specific features to survive.
Sorrells stated: “It’s clear that you are not competing solely on Google visibility.” You are in competition to be recommended AI.
Estis Green summed up the new economic climate well when she said: “I do not believe it. The skies are falling.” We need to alter our thinking and behavior.
Projections / Trends for 2026
- RevPAR: 0.6 percent (Heavily World Cup dependent)
- ADR and inflationADR of 1.0 % vs. inflation rate 2,4 % (Pressure at margins).
- Buy NowLow number of new constructions; large conversion activities. Supplies 19% of the pipelines under construction. High conversion activity.
- CustomersAI is becoming more popular with frequent and wealthy travelers
- Main ThreatRenting short-term and margin erosion through inflation/labor
- Find out more about Searching HabitsGenAI is used by 40 percent of U.S. travellers to plan their trips.
- You can also Contact UsThe shift towards wealthy travellers and small-to-medium businesses
