New data from HotelData.com reveals how hoteliers protected profitability amid early 2025 uncertainty — and offers practical budgeting insights to sustain that performance into 2026.
ATLANTA — As hoteliers enter the 2026 budget season, many are reflecting on a first half of the year that delivered mixed signals. While revenue performance fell short of expectations across much of the industry, gross operating profit margins (GOP%) remained largely intact for the thousands of hoteliers using Actabl’s business intelligence software, ProfitSword.
For owners and operators alike, focusing on gross operating profit (GOP) is critical because it provides the clearest view of how effectively a management team is managing the costs within its control.
Placed in comparison with revenue-only metrics, we can see the divergence between top-line challenges and bottom-line stability. This offers important insight into how hotel operators are managing today and how they should plan for tomorrow.
The story of 2025 so far for the hotel management companies we work with has been one of external revenue pressures met with internal operational discipline. It’s a reminder that forecasting and budgeting are not just financial exercises, but strategic ones, and that hotel leaders must use every tool available to adapt to shifting demand and cost dynamics.
Revenue softness: RevPAR misses the mark
In the first half of 2025, many hotels struggled to meet their revenue targets. Our data shows that hotels budgeted for an average revenue per available room (RevPAR) of $123.89, slightly below the H1 2024 average of $125.69. In reality, RevPAR averaged just $105.12, a 15% drop from projections to actuals.
The decline was driven primarily by lower occupancy, not rate erosion. International inbound travel dropped significantly due to a combination of tariffs, macroeconomic uncertainty, and shifting leisure travel patterns. Markets that rely heavily on overseas visitors were particularly affected.
Despite these headwinds, average daily rate (ADR) performance was comparatively stable. Hotels using Actabl budgeted for an ADR of $191.35 and achieved $186.14. That level of discipline suggests strong brand positioning and a continued emphasis on maintaining rate integrity, even when demand is soft.
Looking ahead, hotels have forecasted a RevPAR of $108.92 and an ADR of $192.39 for the second half of 2025. Whether those projections hold will depend largely on a rebound in demand, both domestic and international.
Margin management: GOP holds steady
In contrast to revenue, profitability held firm, according to data from hotels working with Actabl. Hotels budgeted for an average GOP% of 37.8% in H1 2025 and landed at 37.7% in actuals - nearly spot-on. This stability is notable given the revenue underperformance.
What explains this resilience? In short: better cost control.
Forecasting and budgeting are not just financial exercises, but strategic ones, and...hotel leaders must use every tool available to adapt to shifting demand and cost dynamics.
Steven Moore
Many operators have become more agile in how they manage labor, departmental spending, and service delivery. Flexible staffing models, smarter scheduling, and closer alignment of costs to occupancy are all contributing factors. In some cases, automation and more consistent SOPs have also helped protect margins.
Looking ahead, hotels are forecasting GOP% to climb to 39.3% in the second half of 2025.
Of course, not all properties operate on the same margin expectations. Limited-service and extended-stay hotels often exceed 40% GOP due to simpler service models and greater room-revenue reliance. Full-service and luxury properties, which typically have higher labor and operating costs across multiple departments, tend to operate with thinner margins, but may still be highly successful relative to their segment.
Strategic planning: Insights for 2026 budgeting
As the hotel budgeting process begins in earnest, several takeaways from performance in the first half of the year offer valuable insights for decision-making:
● Occupancy recovery must lead the revenue strategy. While ADR has held up, a full recovery in RevPAR will require stronger demand. This may involve rethinking channel mix, improving conversion, or enhancing the guest experience to drive repeat business.
● Forecasting models must become more adaptive. The sizable gap between budgeted and actual RevPAR in H1 reflects a broader challenge: static annual budgets struggle to reflect real-world volatility. Many operators are adopting rolling forecasts or quarterly reforecasting to stay more aligned with market conditions.
● Labor remains a key lever. Labor continues to be the largest hotel expense and the most powerful tool for managing margins. Department-level productivity tracking, labor cost modeling by occupancy, and flexible staffing strategies are now standard practice in top-performing hotel companies.
● GOP% isn’t a one-size-fits-all metric. Operators should benchmark against similar properties in terms of scale, service level, and revenue mix. Looking only at industrywide averages can lead to unrealistic or misaligned targets.
A new resource for benchmarking: HotelData.com
To help hotel leaders ground their 2026 planning in real-world performance, Actabl has launched HotelData.com, a free resource that provides hoteliers with up-to-date benchmarks and insights drawn from thousands of properties across the US.
The figures cited in this article come from the first report available on the site: our 2025–2026 Hotel Budget Guide, which includes detailed, aggregated performance data on RevPAR, ADR, labor, and GOP% from H1 2025 budgets, actuals, and H2 forecasts.
While the economic backdrop may remain uncertain, one thing is clear: Hotel operators are becoming more disciplined, more data-driven, and more resilient. Revenue fluctuations are real, but so is the industry’s growing ability to respond with agility and precision. For hotel leaders, 2026 offers an opportunity not just to recover but to reset. That begins with better hotel data and better decisions.
Steven Moore is CEO, Actabl.
The views and opinions expressed in this content do not necessarily reflect the opinions of Hotel Investment Today by Northstar or Northstar Travel Group and its affiliated companies.