

Why 2026 Looks Rocky for U.S. Hotels And Where Smart Investors Can Hit Big | Jan Freitag E50
Sep 23, 2025
Jan Freitag, the National Director of Hospitality Analytics at CoStar Group, offers keen insights into the hotel industry's future. He discusses why the market shifted to stagnation and the risks of rising expenses outpacing revenue growth. Jan highlights the luxury segment's resilience and how local market nuances impact recovery. He emphasizes the importance of data analytics in identifying investment opportunities and shares strategies for succeeding in the sub-$10M market amidst a challenging landscape.
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Rapid Shift From Growth To Flat Demand
- The hotel industry shifted from rapid growth to effectively flat performance within eight months.
- This rapid change demands re-evaluating underwriting assumptions for 2026 deals.
Underwrite Against Demand Drivers And ADR Risk
- Focus underwriting on demand drivers: group, corporate transient, and leisure at the property and submarket level.
- Monitor ADR growth carefully because rate weakness combined with rising costs can crush margins.
GDP, ADR, And CPI Relationships Have Broken
- Historical relationships broke: GDP no longer reliably lifts room demand and ADR isn't consistently outpacing CPI.
- That disconnect post-COVID creates an unusual profit-pressure environment.