Hotels & Motels

The 45,358 hotel and motel companies in the US provide lodging for business and leisure travelers. The industry includes chains, franchises, and independent hotels. Franchise hotels are branded properties with independent owners. The franchise brand (Marriott, Hampton Inn, etc.) is known as the "flag." Large chains may offer franchises in addition to operating corporate-owned properties. About 70% of hotels are affiliated with a chain.

Large Capital Commitments

Building a new hotel requires significant investment in land, buildings, furnishings, and marketing expenses.

Integrating Technology

Hotels are rapidly integrating technology to improve their operational efficiency, mitigate labor shortages, and enhance the guest experience.

Sep 3, 2026 - Investors Target Hotels in Need of a Makeover

• Hotel dealmaking is picking up as investors target aging properties that need renovations but whose current owners often lack the cash to make them. US hotel sales jumped 28% in the first half of 2026 from a year earlier, according to MSCI, helped by lower short-term interest rates, solid travel demand, and falling property prices. Many hotels are also overdue for brand-required renovations, which typically occur every seven to 10 years, putting pressure on highly leveraged owners to sell rather than spend more themselves. Buyers see an opportunity to acquire these properties at discounts and invest heavily in upgrades. The strategy is getting another boost from limited hotel construction: CoStar says new rooms are being added at just 0.5% of existing supply this year, compared with a long-term average of 1.6%, making renovated existing hotels more attractive than costly new development.
• Hotels have become the engine behind the growth of online travel agencies (OTAs), giving lodging operators an outsized role in the future of the channel. OTA bookings in the US reached $100.3 billion in 2025, according to Northstar Travel Group, and hotels accounted for 63% of those bookings. Airlines have had more success steering customers to their own websites and apps, leaving air travel with a much smaller role in the OTA business. Now, OTAs remain an important source of demand for hotels even as operators work to build their direct-booking business and reduce distribution costs. The challenge is that US hotel room revenue growth is cooling, which could put pressure on OTA growth as well. In response, OTAs are expanding into areas such as packaged trips, cruises and activities and investing in AI, B2B distribution, and trip packaging to broaden their business beyond hotel rooms.
• Extreme heat is becoming a bigger factor in where and when Americans travel, creating new challenges for hotels. Around 4 in 10 adults say extreme heat has affected their travel or vacation plans, up from about one-quarter in 2024, according to an AP-NORC poll. Travelers may avoid especially hot destinations during the summer or shift trips to spring and fall, potentially changing traditional peak seasons for some hotels while benefiting properties in cooler markets. Heat can also raise operating costs. In a 2026 American Hotel & Lodging Association survey, 50% of hotel operators identified utility and energy costs as a financial pressure. Keeping rooms and common areas cool during prolonged heat waves can increase energy and water use and put more strain on hotel systems. Hotels may need to invest in more efficient cooling while adjusting pricing and marketing to changing travel patterns.
• The AI infrastructure boom is beginning to ripple into the hotel industry, with Hilton executives telling investors that construction of data centers is helping drive demand for its midscale and upper-midscale brands. Contractors, engineers, and other project workers book extended stays near major development sites. The company said the trend contributed to a 5% increase in US revenue per available room (RevPAR) during the second quarter and was one factor behind its decision to raise its full-year outlook. The broader lodging market also continues to strengthen. CoStar and Tourism Economics recently raised their 2026 hotel forecast after US room demand increased by more than 8 million room nights through the first of the year. The firms now expect US RevPAR to grow about 2.8% this year, suggesting that large-scale infrastructure projects, including data centers, are becoming an incremental source of lodging demand.

Industry size & Structure

A typical hotel employs fewer than 30 workers and generates about $5 million in annual revenue.

• The hotel industry consists of about 45,340 companies that employ 1.3 million workers and generate $221 billion annually.
• The industry includes chains, franchises, and independent hotels. Franchise hotels are branded properties ("flags") with independent owners. Large chains may offer franchises in addition to operating corporate-owned properties. About 72% of hotels are affiliated with a chain.
• Hotel categories are defined by price and the level of services and amenities offered. General classifications include luxury, upscale, midscale, and economy.
• Specialized hotels include resorts (which cater to vacationers) and extended stay properties (which include kitchens and additional space). Some corporate chains offer timeshare units, which give guests the option to stay at a particular property during a scheduled period.
• Large companies include Marriott International (Marriott, Renaissance, Courtyard, Fairfield Inn, Ritz-Carlton), Hilton Worldwide (Hilton, Doubletree, Embassy Suites, Hampton Inn, Homewood Suites), InterContinental Hotels (Holiday Inn, Crowne Plaza, Staybridge Suites, Candlewood Suites), and Best Western.
• Varying strength among flag hotels leads to varying levels of risk for new properties.