Q1 2026 gave hotel leaders a rare combination: stronger demand, higher rate, better total revenue, and improved profitability. Across the dataset discussed in Actabl’s webinar, ADR rose 6%, RevPAR increased 8.7%, TRevPAR grew 9.4%, and GOP improved by four percentage points year over year.
That is the good news. The harder question is, what comes next?
Our recent webinar, Q1 2026: Demand Returns But Market Bifurcation Continues, saw our Head of Research & Editorial, Sarah McCay Tams, lead hotel leaders through the data from the latest HotelData.com Profitability report.
She was joined by a panel of experts who shared their reactions, insights, and advice for hoteliers on operating more profitably in 2026.
- Brenna Halliday, Industry Strategist and Analyst
- Alise Deeb, Chief Revenue Officer, Dragonfly Strategists
- Matt McClelland, Chief Operating Officer, OTO Development
- Charlie King, Chief Financial Officer, OTO Development
The panel agreed that the rest of 2026 should not be managed as a demand downturn. It should be managed as a revenue-efficiency challenge. Hotels may still have guests in the building, but the winners will be the teams that capture the right demand, protect rate when it matters, grow total guest value, and keep costs aligned with the business they actually have.
- Catch the full webinar On Demand here.
Demand Improved, But Not Equally
Charlie King, Chief Financial Officer at OTO Development, opened with a reminder that Q1’s growth deserves attention. Long-term RevPAR growth tends to be much lower, he said, which makes the quarter’s 8.7% RevPAR increase notable.
“This is pretty amazing growth,” King said.
But he also urged operators to look beneath the average. Geography, chain scale, and market position all matter. RevPAR growing faster than ADR could suggest stronger occupancy, better demand conversion, or a lower-rated mix. It could also signal that some hotels priced too cautiously.
Brenna Halliday, Industry Strategist and Analyst, saw broad market strength, but with important caveats. Q1 “surprised to the upside,” she said, despite geopolitical pressure and bad weather in January. She also pointed to a shift in travel behavior, with more Americans staying domestic rather than traveling abroad.
“So far, I’m expecting things to continue to surprise,” Halliday said.
Profit Still Comes Down to Execution
For Matt McClelland, Chief Operating Officer at OTO Development, the operational story was clear. Higher occupancy does not guarantee higher profit. In fact, it can create new problems if hotels staff poorly, take the wrong business, or lose discipline on property.
“Not all occupancy is good occupancy,” McClelland said.
His point was simple: operators need to know what sits inside the occupancy number. Stayover rooms, airport turnover, group mix, discounted OTA business, and labor needs all change the profit equation. The best hotels do not throw hours at volume. They schedule with precision, watch productivity, and hold leaders accountable.
“Occupancy gives you the opportunity,” he said. “Execution turns that opportunity into profit.”
That theme ran through the full discussion. The panel did not treat profitability as a finance-only issue. They framed it as a shared commercial and operational discipline.
The Chain Scale Split is Still Real
The report showed broad gains, but not equal gains. Luxury led Q1 performance, while Economy saw pressure on ADR, RevPAR, and TRevPAR. Still, Economy improved GOP, proving that margin can improve even when revenue is under strain.
Halliday said the industry’s K-shaped recovery remains in place. Higher-income travelers continue to spend, while group demand and business travel have helped Upper-Upscale and Luxury hotels. Those segments also benefit from stronger urban demand and more opportunities to grow non-room revenue.
Alise Deeb, Chief Revenue Officer at Dragonfly Strategists, added that commercial teams need to avoid blunt reactions by segment. Even economy hotels may have more room to protect rate than they think, especially during the summer drive season.
“There’s a lot of pressure to buy occupancy,” Deeb said. “But one point of occupancy is not the same as one point of ADR.”
TRevPAR is Moving From Side Metric to Strategy
One of the strongest takeaways from the webinar was the rising importance of TRevPAR. At the all-hotels level, Q1 TRevPAR was 35% higher than rooms-only RevPAR. That gap shows how much value sits outside the room.
For Luxury and Independent hotels, the opportunity was even larger.
Deeb pushed the conversation beyond RevPAR and even beyond TRevPAR. Revenue leaders, she argued, need to understand profitability, cost of acquisition, channel mix, guest personas, length of stay, and how spending changes during the guest journey.
She also challenged hotels to rethink underused spaces.
“Take a new set of eyes,” Deeb said. “There’s so much more you can do.”
That could mean activating meeting space, rethinking business centers, improving packages, selling upgrades, or building offers around what guests will pay for. But the panel warned against chasing revenue that does not flow through.
King said parking, amenity fees, catering, meetings, and food and beverage all offer potential. Still, F&B and meetings need tight cost control.
“You can’t just focus on top line,” King said. “You’ve got to focus on expense efficiency.”
The Forecast Calls for Tighter Choices
The report’s Q2 through Q4 forecast was more cautious than Q1’s actual performance. Occupancy was expected to hold close to budget, but ADR, RevPAR, and TRevPAR were forecast below budget.
That distinction matters. It does not suggest empty hotels. It suggests hotels may need to work harder to capture the same value from demand.
McClelland said this is where hotels need to change how teams think and how they incent performance. OTO has moved sales teams toward TRevPAR-focused bonus plans, which changes behavior across parking, room rental, audiovisual, and other revenue streams.
“RevPAR alone is an old-school way of thinking,” he said.
Deeb agreed and argued that forecasting should be a cross-functional process, not a revenue-management solo act. Sales, marketing, revenue, finance, and operations all need to bring their plans to the table.
“Forecasting isn’t really about prediction,” she said. “It’s about alignment.”
World Cup Expectations Need a Reality Check
The panel also discussed how the FIFA World Cup could affect hotel performance in 2026. Deeb warned that some host markets may have overestimated pricing power. International travelers may be comfortable using short-term rentals, public transportation, and nearby secondary markets rather than paying peak rates in host cities.
Her advice: do not forecast from hype. Use recent trends, current booking behavior, and market-specific signals.
“Go get your three data points and then start making decisions,” Deeb said.
What Hotel Leaders Should Do Now
The panel closed with a clear message: act before the back half of the year gets away from you.
For CFOs, King said the priority is to capitalize on peak nights, price correctly, and use base group where demand is weak, so hotels can yield transient business closer to arrival.
For revenue teams, Deeb said weekly channel and segment mix deserve more attention. She also pointed to AI as a tool that can help revenue leaders become broader commercial leaders, focused not only on pricing, but also on guests, loyalty, conversion, and profit.
For market watchers, Halliday said domestic travel and booking pace will be key signals.
For operators, McClelland was direct.
“Focus on the fourth quarter right now,” he said.
November and December can soften fast, especially when booking windows stay short. Hotels need contingency plans now: what business to take, which rate floors to protect, which promotions support strategy, which ancillary opportunities to activate, and how labor should flex.
The message from the webinar was not pessimistic. It was practical.
Q1 proved hotels can grow revenue and improve profit at the same time. The rest of 2026 will test whether they can do it with more precision. The hotels that win will not chase demand for its own sake. They will protect the demand that pays, convert more guest value beyond the room, and align every commercial decision with profit.
Missed the webinar? You can now watch it On Demand here.
