The 2027 Hotel Playbook: Invest with Purpose, Operate with Discipline

As the hotel industry prepares to gather at The Lodging Conference in October, the agenda clearly shows what is on owners' minds. Financing, development, artificial intelligence, extended stay, renovations, CapEx, profitability, and the owner-operator relationship are part of this year's conversation.

At Meyer Jabara Hotels, these conversations carry additional significance as we prepare to celebrate our 50th anniversary in 2027. Reaching that milestone gives us a chance to look back, but more importantly, it reinforces what five decades in this business have taught us: Hotel cycles come and go, but disciplined investment, strong operations, and an unwavering focus on people and the guest experience remain fundamental to long-term success.

As we look toward our next 50 years, one question stands above the rest: Where should we put our money in 2027?  This question is becoming more important because next year is shaping up to look quite different.

The latest STR and Tourism Economics forecast reports U.S. RevPAR to increase 4.4% in 2026, supported by a 1.7% increase in demand and 3.1% ADR growth. Strong leisure and business travel, along with extraordinary events such as the World Cup, helped drive performance.

For 2027, however, STR expects RevPAR growth to slow to 2.1%, with ADR increasing 1.6% and demand growing 1.1%. That does not suggest a weak year. It suggests a more normalized one. And in a lower-growth environment, operational execution and capital discipline become even more important.

Do Not Build 2027 Based on 2026

One of the biggest mistakes we can make is assuming this year's performance becomes next year's baseline. Business travel has strengthened, group demand continues to recover, and the U.S. hotel industry sold a record number of room nights during the first half of 2026, up 11.4 million room nights from the same period in 2025, according to STR.

Recent performance also suggests momentum did not disappear with the World Cup. U.S. hotel RevPAR increased 6.2% year over year for the week ending August 15, marking our industry's 19th consecutive week of RevPAR growth, according to CoStar data.

The message for owners: budget carefully. Understand what drove your property's 2026 results. Separate recurring demand from event-driven demand, then build 2027 expectations market by market and hotel by hotel.

For a management company operating multiple brands across multiple states, we see firsthand why national averages only tell part of the story. A full-service hotel dependent on group business has a very different 2027 opportunity than a select-service hotel driven by corporate transient demand or a property serving leisure travelers.

Capital Budgets Need to Become Investment Plans

CapEx is often treated as a list of items to replace. Every significant capital expenditure should answer at least one question: Does it protect the assets, improve guest experiences, lower operating costs, or create additional revenue?

Some investments are unavoidable. Roofs, HVAC systems, elevators, plumbing, life-safety systems, and other infrastructure eventually need attention. Deferring those projects may help today's cash flow but create a much larger bill tomorrow. Evaluate other investments through the guest's eyes. If guestrooms, bathrooms, public spaces, technology, or food-and-beverage venues keep a hotel from competing effectively, postponing investment can eventually affect rates, reviews, and market share.

Then there is growth-oriented CapEx. Could underutilized space become a revenue-producing venue? Could an energy-management system lower utility expense? Could technology reduce repetitive work? Could a renovation reposition the property and support a higher ADR?

These are precisely the issues reflected in The Lodging Conference's 2026 agenda, which includes sessions devoted to proactive CapEx, managing renovations, financing PIPs and renovations, development, and using design to drive ROI.

The important word is return. In 2027, capital needs to work harder.

Financing Is Available, But Owners Need a Story

The lending environment is also evolving. According to JLL's 2026 Global Hotel Investment Outlook, U.S. hotel debt liquidity improved in 2025, with $64 billion in originations. Banks, debt funds, and CMBS lenders remain active, and approximately $88 billion in hotel loans are scheduled to mature through 2027. That creates pressure and opportunity.

Owners facing refinancing while also confronting a PIP or major renovation need a credible plan. Lenders want to understand not only what a property is worth today, but how it will perform tomorrow.

That makes the operating story critical. What is the hotel's competitive position? What is driving demand? Where can margins improve? What capital is required? How will that investment affect performance? The operator needs to be part of those conversations.

There will also be considerable discussion about which hotel segments offer the greatest opportunity in 2027.

Luxury continues to outperform. CBRE's midyear hotel outlook forecasts luxury RevPAR growth of 5.2% in 2026, compared with 0.7% for midscale, and a 0.6% decline for economy. STR also expects select-service properties to finish 2026 with approximately 3.6% RevPAR growth.

Extended stay remains attractive enough that The Lodging Conference is devoting a session specifically to development and investment opportunities in the segment. Its operating model, longer stays, and demand from corporate assignments, healthcare, infrastructure, relocation, and training can be compelling in the right market.

Full-service hotels also have reason for optimism. CBRE reported that convention-linked group RevPAR was up 5.4% year over year through April and expects group momentum to continue into 2027. But I would caution against chasing a segment simply because it is today's favorite.

Our experience across brands, property types, and markets reinforces something I believe strongly: no hotel segment is universally superior. The right asset in the right market with the right cost structure and operating strategy can outperform the hottest segment in the wrong location.

In 2027, Profitability Wins

Perhaps the biggest shift owners need to make is moving the conversation beyond RevPAR. RevPAR will always be an important benchmark, but it doesn't tell the full story of an asset’s revenue potential or its profitability. Owners ultimately invest for profit and asset value, and with STR expecting hotel expenses to grow faster than revenues, continued margin pressure makes it increasingly important to focus on both sides of the equation.

Increasingly, we need to think in terms of TRevPAR—Total Revenue Per Available Room—and ask how effectively we are monetizing the entire guest relationship.

A guest’s economic value does not begin and end with the room rate. It can include food and beverage, parking, meeting and event spending, upgrades, early check-in and late checkout, premium amenities, retail, experiences, and other property-specific offerings. In a lower-growth environment, capturing more of that spending can become just as important as pushing room rate.

That also means ancillary revenue cannot simply be discussed as an opportunity. It needs to become an operational discipline. Hotels should identify the products and services guests value, price them appropriately, make them easy to purchase, train teams to offer them naturally and—critically—ensure that every legitimate charge is consistently captured and collected.

Small amounts of revenue leakage across hundreds or thousands of transactions add up to meaningful dollars over the course of a year. Improving ancillary collections is one of those opportunities that may not require significant capital investment but can directly impact the bottom line.

Food and beverage deserves particular attention. Rising costs across food, beverages, labor, supplies, utilities, and other inputs continue to challenge margins. In that environment, menu pricing cannot be a once-a-year exercise.

Operators need to understand the true cost and contribution margin of what they sell. That means routinely evaluating purchasing, portion sizes, menu engineering, waste, labor, pricing, and product mix while remaining sensitive to the value proposition for the guest. The goal is not simply to charge more. It is to price intelligently and protect profitability without compromising quality or experience.

If RevPAR growth moderates to roughly 2% next year, we have to ask a more difficult question: How do we make profit grow faster than revenue?

That requires looking everywhere: labor productivity, procurement, energy consumption, distribution costs, revenue management, food and beverage, ancillary revenue, technology and AI. There may not be one initiative that transforms profitability on its own. The opportunity is often found in disciplined improvements across the entire operation.

The same standard should apply to technology investments. We should not buy technology simply because it is new. We should ask what revenue it generates, what expense it reduces, what employee time it saves or what guest friction it eliminates. Technology—and increasingly AI—should be evaluated with the same rigor as any other investment in the asset.

If we cannot answer those questions, we should question the investment.

As we prepare to celebrate 50 years in hospitality, we have the benefit of looking at 2027 not as an isolated year, but as another chapter in an industry that is constantly evolving. Over five decades, we have learned that successful owners do not simply react to cycles. They prepare for them.

That is why discipline will matter more than optimism or pessimism in the year ahead. This is not about spending aggressively or cutting indiscriminately. It is about understanding the asset, understanding the market, and deploying capital and resources where they can create measurable value.

In a year when top-line growth may be harder to come by, the owners who outperform will be those who look beyond RevPAR, capture more of the revenue already within their properties, operate with greater precision, and remain relentlessly focused on converting revenue into profit and long-term asset value.

Fifty years in this business have taught us that another cycle, another challenge, and another opportunity will always come. The owners who make thoughtful decisions today will be better positioned to capitalize on whatever comes next.