2026: AI Takes Center Stage in Hotel Operations and Real Estate

By Erik Ransdell and Mike Annunziata Strands Realty Group January 14th, 2026

As 2026 begins, artificial intelligence has moved into a different phase within the hotel industry. It is no longer a future-facing concept or a pilot program reserved for large brands. It is now a practical operating tool that is influencing margins, staffing decisions, guest engagement, and how hotel real estate is valued and traded.

Across the U.S., hotel owners, operators, and investors are no longer asking whether AI belongs in their business. The real question is how effectively it is being used and whether it shows up in operating results. This matters because the industry has moved beyond the post-pandemic rebound phase. Demand has stabilized, labor remains tight, and capital is selective. In this environment, efficiency, consistency, and visibility into performance matter more than rapid growth.

What we are seeing across a wide range of markets is that AI has become one of the tools helping hotels operate with more discipline. It is not about replacing people or chasing trends. It is about managing costs, improving revenue capture, and positioning assets to compete for capital in a market that rewards clarity and execution. From Concept to Core Operations

In 2026, AI is no longer sitting on the sidelines. According to national hospitality outlooks, nearly half of routine hotel functions are now supported by AI-driven systems. These include revenue management, guest messaging, scheduling, forecasting, and parts of inventory control. What makes this shift meaningful is not the technology itself, but the consistency it brings to daily operations.

Hotels using AI for pricing decisions are reacting faster to demand changes and are less dependent on manual intervention. Systems adjust rates based on booking patterns, events, length of stay, and historical behavior. For owners, this means fewer missed revenue opportunities and more predictable cash flow. For buyers and lenders, it means underwriting based on performance that is less vulnerable to human error.

On the guest side, AI-supported communication has become standard. Automated messaging handles confirmations, basic requests, and upsell offers, freeing staff to focus on service issues that actually require attention. This has proven especially useful in markets where staffing remains a challenge and turnover is high.

The takeaway is simple. AI is now embedded in how many hotels operate, and properties that are not keeping pace risk falling behind, not because guests demand flashy tech, but because margins are thinner and mistakes are more costly.

Labor Pressure Has Not Eased, but Operations Are Adjusting

Labor remains one of the defining challenges of the current cycle. Wages have increased, hiring pools are smaller, and turnover continues to affect consistency. This is true across coastal markets, Sun Belt cities, and secondary metros alike.

AI has not eliminated the need for staff, but it has changed how labor is deployed. Front desks operate with smaller teams supported by self-service tools. Housekeeping schedules are optimized using occupancy forecasts. Food and beverage operations are using predictive systems to manage purchasing and reduce waste.

In several markets, hotels using AI-supported inventory and scheduling tools are reporting meaningful reductions in variable costs. Waste is lower, overtime is easier to control, and staffing decisions are less reactive. These improvements do not always grab headlines, but they directly affect net operating income.

For owners holding assets through this cycle, these efficiencies are becoming essential. For investors evaluating acquisitions, they are increasingly part of the due diligence process.

How AI Is Showing Up in Transactions

From a brokerage and investment standpoint, the influence of AI is most visible in how deals are being priced and structured. Hotels that can clearly demonstrate operational efficiencies supported by technology are easier to underwrite and often trade with less friction.

This does not mean buyers are paying premiums simply because a property uses AI. It means buyers are more comfortable with forward-looking assumptions when systems are already in place and producing results. Cleaner financials, better forecasting, and visible cost controls all reduce perceived risk.

Across multiple recent transactions, AI-ready hotels have seen modest cap rate compression compared to similar assets without modern systems. The difference is not dramatic, but in competitive markets, even small adjustments matter. These assets also tend to move through diligence more efficiently, which is important in an environment where both capital and patience are limited.

For sellers, this creates a clear opportunity. Preparing a property for market now involves more than physical condition and brand alignment. It also includes being able to explain how the hotel operates and how technology supports performance.

A National Market Reality with Local Differences

While AI adoption is happening nationwide, its impact varies by market depending on demand drivers, labor conditions, and asset type. Understanding these local dynamics is key for owners and investors making decisions in 2026.

In California, hotels in major urban and coastal markets continue to face high operating costs and regulatory complexity. AI is being used to offset some of these pressures through tighter pricing strategies and leaner staffing models. Event-driven pricing and demand forecasting are especially important in markets tied to conventions, entertainment, and international travel.

In Arizona, particularly in Phoenix and Scottsdale, AI plays a broader role that extends into resource management. Energy and water efficiency tools are helping resort and upscale properties control costs in an environment where sustainability and operating discipline are closely linked. These systems are also becoming part of the investment story, especially for buyers focused on longer-term holds.

Georgia, led by Atlanta, presents a different profile. As a major convention, corporate, and film market, demand patterns can be uneven. AI-supported forecasting and personalization tools help hotels manage peaks and valleys more effectively. Properties near convention centers and event corridors benefit from systems that can adjust pricing and staffing quickly without relying solely on manual oversight.

Tennessee continues to draw attention for its combination of leisure, entertainment, and business travel. In markets like Nashville, AI is being used to enhance guest engagement around events and to improve upselling opportunities. In secondary Tennessee markets, technology is helping older assets operate more efficiently, making them more attractive to value-add investors.

Across these regions and others, the common theme is that AI supports better decision-making. Whether the goal is to manage costs, capture revenue, or prepare for a transaction, technology has become part of the baseline.

Financing Conditions Reward Clarity and Control

Debt markets in 2026 remain cautious but functional. Traditional lenders are active in core locations and with experienced sponsors. Private capital continues to fill gaps for acquisitions, refinances, and repositionings, though pricing remains elevated.

What has changed is the level of scrutiny applied to operations. Lenders want to understand how a hotel manages variability, particularly around labor and revenue. Properties with modern operating systems and clear technology roadmaps are often viewed more favorably because they reduce uncertainty.

In several recent financing discussions, AI-supported operations have helped borrowers present stronger cases for loan terms. Better forecasting and reporting give lenders confidence that performance will be monitored and adjusted as conditions change.For owners planning refinances or acquisitions later this year, having a clear operational strategy that includes technology is becoming standard practice rather than a differentiator.

Limited New Supply Favors Existing Assets

New hotel construction remains constrained across much of the country. High construction costs, tighter lending, and entitlement challenges have slowed ground-up development. As a result, much of the opportunity in this cycle lies in existing assets.

This has shifted focus toward renovations, brand changes, and operational upgrades. In many cases, adding or improving technology infrastructure offers one of the highest returns on invested capital. These upgrades can improve performance quickly without the risks associated with major construction.

Owners of older properties in strong locations are increasingly looking at targeted improvements that modernize operations without overcapitalizing. For investors, this creates opportunities to acquire assets that are operationally behind but well located, with clear paths to improvement.

Treating Technology as Part of the Business

One of the clearer lessons from 2025 and into 2026 is that technology works best when it is treated as part of the operating model, not as an add-on. Systems need to integrate with each other, staff need to be trained properly, and ownership needs to understand what data matters.

Hotels that struggle with AI adoption often do so because tools are layered on without a clear plan. The properties that succeed are the ones that align technology with their operating goals and market realities.

From an investment standpoint, buyers are increasingly asking practical questions. What systems are in place? How long have they been used? What impact have they had on margins and guest satisfaction? Clear answers to these questions help deals move forward.

Looking Ahead Through 2026

The remainder of 2026 is expected to be steady rather than explosive. Revenue growth will likely be incremental. Costs will remain elevated. Supply will stay limited. In this environment, performance will come from execution.

AI will continue to earn its place by doing what it does best. Supporting consistent operations, reducing variability, and helping hotels make better decisions. For owners, this is about protecting and improving value. For investors, it is about underwriting with confidence.

At Strands Realty Group, we work exclusively with hotel owners, operators, and investors to navigate transactions, evaluate repositioning strategies, and unlock value across diverse hospitality markets. Whether you're preparing to sell, looking to buy, or weighing upgrades, we bring a real-time understanding of what the market is rewarding—both operationally and at the negotiating table. Technology is now a core part of that value equation, and we're here to help you make it work to your advantage.

If you are considering a sale, acquisition, or strategic shift this year, the right starting point is understanding how your asset operates today and how it can operate better tomorrow. We are always available to talk through a specific market, asset, or idea and help turn market conditions into practical results.

eThank you for your continued trust. We look forward to working with you throughout 2026.