US Accommodation and Food Services Sector

The 771,900 establishments in the US accommodation and food services sector prepare meals, snacks, and beverages to customer order for immediate consumption or provide short-term lodging for travelers and vacationers.

Labor Intensive, High Turnover

Food service and accommodation operations are labor-intensive, and the sector struggles with turnover.

Economic Sensitivity

The accommodation and food service sector is driven by discretionary spending and is vulnerable to economic downturns.

Sep 8, 2026 - Investors Targeting Aging Hotels

• US hotel investment is rebounding as buyers acquire aging properties at discounted prices and invest heavily in renovations, The Wall Street Journal reports. Hotel sales rose 28% year over year in the first half of 2026, helped by lower short-term interest rates, strong luxury demand, and travel associated with major events and data center construction. Many hotel owners have struggled to finance required renovations amid high debt costs, and hotel brands are becoming more aggressive about enforcing property improvement requirements, according to WSJ, thus pushing some owners to sell rather than fund costly upgrades. For accommodation providers, increased investment could improve property quality and competitiveness but also raise pressure to renovate aging rooms, lobbies, and amenities. Limited new hotel construction may benefit current operators by restraining room supply, while making older properties more attractive acquisition targets because buying and renovating can be cheaper than developing new hotels.
• Restaurants remain the top driver of summer travel spending, according to the National Restaurant Association's 2026 Summer Travel and Dining report. More than half of consumers (55%) surveyed said they plan to take at least one overnight domestic trip this summer, and 98% of those travelers expect to visit a restaurant, making dining the most popular vacation activity, per NRA's report. Travelers also plan to dine in (93%), use takeout, delivery, or drive-thru (90%), and visit coffee shops or snack outlets (84%). Restaurants receive about $3 of every $10 spent by travelers, underscoring the hospitality sector's reliance on tourism. Affordability remains a priority, with 90% of travelers citing value and convenient locations as key factors and 70% seeking discounts or promotions. Hotels and restaurants in tourist destinations stand to benefit from strong travel demand but may need competitive pricing to attract cost-conscious visitors.
• Artificial intelligence is changing how travelers find and book hotels, and could reduce the importance of traditional competitive advantages such as distribution networks by putting greater emphasis on the guest experience, Hospitality Technology reports. Hospitality executives at HITEC 2026 said AI will make sophisticated tools for revenue management, personalization, and customer service available to more hotels, increasing the need to stand out through superior service and operations. AI is also expected to help accommodation providers improve labor productivity, forecasting, and guest experiences by tailoring stays to individual preferences. While some executives think AI will reinforce loyalty programs by recommending brands that match travelers' preferences and memberships, others believe it will make it easier for guests to switch brands. Either way, hotels that use AI to improve efficiency while delivering a more personalized and memorable stay are likely to have the strongest competitive advantage.
• Producer prices for accommodations rose 3.7% in July compared to a year ago, after rising 0.9% in the previous July-to-July annual comparison, according to the latest US Bureau of Labor Statistics data. Producer prices are near record highs due to a combination of strong demand from travelers and rising costs for accommodation providers. Employment by accommodation and food services inched up 0.8% year over year in July, while the average sector wage rose 5% YoY in June to $20.53 per hour, down slightly from its peak in May, BLS data show. Minimum wage hikes by states in 2026 on the heels of hourly pay raises last year are driving up the hospitality sector’s payroll costs.

Industry size & Structure

The accommodation and food services sector comprises 771,900 establishments that employ 14.4 million workers and generate $1.3 trillion in annual revenue, according to government sources.

• The accommodation and food services sector represents 3.2% of the nation's Gross Domestic Product (GDP) and employs about 9% of the country's workers.
• The sector is fragmented with the 20 largest firms representing 13.3% of revenue.
• In addition to employer establishments, the accommodation and food services sector has 491,800 owner-operated establishments with no employees. The subsectors with the highest number of nonemployer establishments are special food services (56%), restaurants and other eating places (23%), and traveler accommodation (11%). The owners of nonemployer firms typically perform the work and may outsource support functions like marketing and accounting.
• The US Accommodation and Food Services sector shed nearly 20% of its employees in 2020 due to the pandemic but recovered to surpass 2019 levels in 2024, according to the Bureau of Labor Statistics.