Hospitality Volatility Is the New Operating Reality

And that’s why hotels need to look at staffing differently

By Nicole Beall, CEO, Xclusive Services

The Market Stopped Moving in a Straight Line

Hotel leaders are planning for a market that is harder to predict and harder to staff. Labor availability is uneven. Costs keep rising. Demand no longer follows last year’s pattern. Business travel is still recalibrating. Leisure demand is more sensitive than ever to price, confidence, weather, and local events. Group business can compress a month and disappear the next.

None of that changes what is expected of a hotel. Margins still have to hold. Brand standards still have to be met. The guest experience still has to be consistent, every day. That combination — rising unpredictability with unchanged expectations — is what makes this moment different. This is not a short-term staffing disruption. It is the operating environment now, and it has to be built into how hotels plan.

Two forms of volatility are moving at the same time — and neither is behaving the way it used to.

What the Data Shows

The American Hotel & Lodging Association’s 2026 State of the Industry report projects hotel guest spending will reach nearly $805 billion this year, up 1.7% over 2025. That sounds like good news, and in one sense it is. But rising operating expenses are absorbing almost all of it: gross operating profit per available room is still sitting at roughly 90% of 2019 levels.

Hotel owners are naming the pressure directly. In AHLA’s 2026 survey, owners cited cost of goods and supplies (71%), labor costs (65%), fluctuating demand and occupancy (59%), utility and energy costs (50%), insurance premiums (43%), and workforce shortages (42%) as their leading financial pressures.

This Is Bigger Than a Labor Shortage

Staffing is still one of the clearest pressure points. A 2025 AHLA workforce survey found 65% of hotels reporting staffing shortages, and 71% said they had open positions they could not fill despite actively recruiting. On average, hotels were trying to fill six to seven positions per property — housekeeping, front desk, culinary, and maintenance were the hardest to staff.

But labor is only half the equation. Demand planning is getting less certain too. The Global Business Travel Association reported in April 2026 that business travel is continuing, but with more caution and higher costs. Among travel buyers, 28% now expect business travel volume to decline in 2026, up from 16% in January. Only 30% expect trips to increase.

“Waiting for the labor market to normalize is not a strategy. Neither is assuming demand arrives exactly as forecast.”

The real question for hotel leaders is not when conditions will settle down. It is whether the operating model is flexible enough to respond when they do not.

Coverage Is Not the Same as Capacity

For years, the industry has treated staffing as a recurring emergency. Someone calls off, the team scrambles. Occupancy jumps, managers look for temporary help. A room attendant resigns, HR opens another requisition. That kind of reactive staffing is necessary — hotels have to run every day — but it solves today’s schedule without necessarily making tomorrow’s operation any stronger.

Coverage asks: who can we get here tomorrow. Capacity asks a different question: what staffing model gives this property the flexibility to respond when conditions change. That is the conversation hospitality leaders should be having now, not after the next call-off.

Staffing Is No Longer One Product

The traditional view — call a staffing company, request workers, review the markup — is too narrow for this environment. Sometimes that is exactly what a hotel needs. It should not be the only option on the table. Staffing today is an operating toolkit, not a single product.

None of these five levers eliminates volatility on their own. Together, they give hotel leaders more ways to manage it than a single vendor relationship ever could.

What Owners and Operators Should Ask Their Staffing Partner

This should change how staffing partners get evaluated. Cost still matters — it always will. But when the conversation stops at hourly rates and emergency coverage, leaders miss the bigger question: can this partner help the property actually operate better.

A hotel struggling with housekeeping coverage might need temporary staffing. It might also need a different labor model, stronger on-site coordination, or a broader outsourcing solution. The goal is not one universal answer — it is more flexibility to find the right one.

For Multi-Property Owners, This Is a Portfolio Question

A single hotel might see a staffing gap in one department. A management company sees that same gap repeated across a portfolio. Handled property by property, the response gets fragmented. Handled strategically, it becomes a pattern leaders can standardize against — simplifying vendor management and building more consistent support across markets.

At Xclusive, we operate across more than 60 markets. The strongest hotel teams we work with are not hoping volatility disappears. They are asking better questions earlier: Where do we need permanent strength? Where do we need flexible support? Which departments carry the most risk when demand shifts? Where are we relying too heavily on last-minute fixes?

The Way Forward

The industry is not returning to the labor market or demand patterns of five or ten years ago. The hotels that perform best from here will not be the ones with the lowest staffing cost or the biggest recruiting budget. They will be the ones that built flexibility, accountability, and capacity into how they operate.

Volatility is not the exception anymore. It is the condition hospitality leaders have to manage — and used strategically, staffing is one of the clearest ways to manage it.

Source Material

American Hotel & Lodging Association, 2026 State of the Industry. Used for: 2026 hotel guest spending, GOPPAR relative to 2019, rising operating expenses. https://www.ahla.com/resource/2026-state-industry

American Hotel & Lodging Association, Rising Cost, Staffing Challenges Persist for Hotels. Used for: owner/operator financial pressures, labor costs, fluctuating demand and occupancy, workforce shortages. https://www.ahla.com/news/rising-cost-staffing-challenges-persist-hotels-travel-demand-expected-hold-steady

American Hotel & Lodging Association, 65% of Surveyed Hotels Report Staffing Shortages. Used for: staffing shortage rate, hard-to-fill roles, open positions per property. https://www.ahla.com/news/65-surveyed-hotels-report-staffing-shortages

Global Business Travel Association, Global Business Travel Continues but Confidence Drops Sharply. Used for: business travel uncertainty, buyer expectations, volume outlook, and operating complexity. https://gbta.org/global-business-travel-continues-but-confidence-drops-sharply-as-conflict-costs-and-complexity-reshape-the-2026-outlook/V4