How to Drive Hotel NOI in 2026: Follow the Money

By Josiah Mackenzie, Vice President of Marketing at Actabl

How do you drive NOI? That was the billion-dollar question on the main stage and in the hallways at the NYU International Hospitality Investment Forum (IHIF) this year.

It was also the question I came to answer on a panel there: Unlocking NOI: The Plays Driving Hotel Performance. The discussion was led by Highgate's EVP of Asset Management, Dina Winder (also President of the Hospitality Asset Managers Association), alongside leaders from Wyndham, Barings, and EY.

The top-line data is encouraging. Jan Freitag, national director of hospitality analytics at CoStar Group, presented an upwardly revised forecast for the U.S. hotel industry: 2026 RevPAR growth of 2.8%, with demand turning positive and supply growth at 0.4%.

But from the perspective of owners and asset managers, a persistent problem that has plagued hotel performance isn’t going away. Costs keep outpacing inflation and top-line growth. CoStar has GOPPAR growing only about 1% this year, and Tourism Economics now puts inflation closer to 3.3% for 2026. AHLA’s Brett Horton reported operating costs rising more than four times faster than the top line. Real gross operating profit is still about 20% below its 2019 level and is expected to remain there through the end of 2027.

So that's the reality hotel operators find themselves in today: a top-line turnaround and a squeezed bottom line. In the words of Aimbridge CEO Craig Smith: "We're happy about the top line. The question is, are you bringing it down to the bottom line?"

There are two parts to the profitability equation. You can grow the top line, but for a lot of operators, that is constrained right now, and more so the further down the chain scale you sit. Luxury continues to grow, with RevPAR forecast to increase 5.3% next year, compared with just 0.2% for economy hotels. The opportunity open to everyone is on the operations side.

Follow the money: Labor is your lever

Labor is the biggest cost center in most hotels, which makes it the biggest opportunity. It is also the number one thing I hear from leaders across the industry.

The best operators right-size staffing to demand. This is a dynamic environment, so the faster you get the signal and the data in and act on it, the more you save and the more NOI you drive.

The numbers back this up. We track thousands of hotels across the U.S. for HotelData.com. In 2025, the top line was reforecast down by CoStar and others. The hotels in our data set that use Actabl technology protected their profit anyway, through operational excellence. We saw this continue into this year: in Q1 of 2026, gross operating profit across that set was up four points, from 38% to 42%.

Owners have noticed this performance gap. Talking with them at the conference, I heard a strong appetite to find managers who will steward their assets and drive performance. For management companies, labor discipline is no longer just a cost story. It is how you win and keep contracts.

The way to do this is not by cutting jobs. It is treating labor as core to the NOI equation and matching staffing to your business at all times. Labor is a line on the P&L, but people are the talent that drives your business forward. Manage it with a people-first mindset and you do not just drive NOI today. You build an operating model that lasts.

Cut through the AI spectacle to what will drive performance

The NYU IHIF conference was held two blocks from Times Square. Amid all the entertainers there, the largest crowd I saw was gathered around an AI-driven robot. It reminded me of what I'm seeing happen with AI in the industry now. Spectacle gets attention, but it’s not where the value for hotels is. The real value of AI and technology is realized when it’s applied to solving real, expensive problems. 

We have structural challenges getting the right talent into hotel companies. Our industry lost a lot of experienced people leading the business through COVID, and those gaps are not closing on their own. AI earns its place here, today. It can consistently coach a manager toward smarter decisions across the business. That is happening now, and it drives real results.

I have worked in hotel technology for 15 years, and the practical barrier has always been setup. Buying the tool was never the hard part. Getting it running was. That is changing. Optical recognition with AI Asset Setup, for example, means you snap a photo instead of spending weeks on setup, and the tools are easier to adopt, so teams actually use them. 

So use AI as a lever. Be honest and demanding about what you expect from it. Hold it to delivering NOI from your hotels.

Start building your advantage now

In the world of investment, it’s been said that time in the market beats timing the market, and I believe that’s true in hospitality, too. Start building your competitive advantage now, and you will be ahead of other operators, whatever happens in the future.

Follow the money. Look at your biggest operational costs. Use the best technology to put better decisions in your team's hands.

That is the idea behind what we offer at Actabl: the insight to know what to do, the tools to do it, and the visibility to know it worked. You can see more about our labor management software here, and I encourage you to reach out to us for a conversation if you’d like to learn more. And if you want to see how your hotels stack up against the market, our benchmarking data and analysis are free at HotelData.com, including our Q1 2026 labor report.