Cloudbeds flags six trends for independent hotels in 2026

Cloudbeds has published its 2026 Independent Hotels Report, outlining six trends it believes will shape the outlook for independent hotel operators.

The study draws on 90 million bookings across 180 countries and follows Cloudbeds' earlier review of 2025 trading data. It argues that independent hotels are entering a period of structural pressure, with weaker room revenue, rising distribution costs and heavier labour bills.

Global revenue per available room for independent hotels fell 5.4% in 2025, according to Cloudbeds' figures. At the same time, online travel agencies accounted for 63.4% of independent bookings, while labour made up between 47% and 60% of operating expenses, depending on region.

Margin squeeze

A central theme in the report is the shift from revenue growth to profit control. Cloudbeds says the strong post-pandemic uplift in room income masked inefficiencies, but operators now face a tighter environment in which costs are rising faster than room revenue.

The best-performing hotels are tracking gross operating profit per available room alongside RevPAR, as owners and managers focus more closely on what remains after expenses rather than headline pricing alone.

Market split

The report also points to a widening divide between the upper and lower ends of the market. Ultra-luxury hotels recorded RevPAR growth of 10.6% in 2025, while economy hotels in the United States saw 18 straight months of RevPAR decline.

It describes this as a K-shaped market, with stronger demand and pricing concentrated in premium segments while budget properties face weaker consumer spending and competition from short-term rental platforms.

That is prompting more operators to consider "premiumization" through guest experience and positioning, rather than relying only on room upgrades or costly refurbishments.

Shifting demand

Another trend is the fragmentation of demand into smaller travel groups defined by purpose rather than age or income. Event-led travel, wellness trips, quiet breaks and socially driven travel discovery are creating narrower but more distinct pockets of opportunity.

For independent hotels, that means demand generation is becoming more targeted. Instead of broad demographic campaigns, operators may need clearer positioning tied to traveller intent, whether around sporting events, concerts, wellness stays or social media discovery.

AI discovery

Changes in how travellers search for hotels could also affect visibility across the sector. Cloudbeds says the share of US travellers using traditional search engines for trip planning fell from 51% to 36% in one year, while use of generative AI tools more than doubled.

Its research found that online travel agencies account for more than half of citations in AI-generated hotel recommendations. That raises the risk of independent hotels becoming less visible in AI-led discovery unless their information is structured in ways these systems can recognise and surface.

The report labels this practice Generative Engine Optimisation, or GEO. In practical terms, it means presenting property details consistently across websites, booking channels and other digital sources so AI systems can retrieve and recommend accurate information.

From search to action

Cloudbeds also argues that AI is moving beyond answering questions and into carrying out tasks. Agentic AI systems are beginning to compare and book rooms, manage service requests, change prices and respond to guest enquiries using live operating data, the report says.

Nearly 80% of hotel chains report using AI in some form, compared with 41% of independent hotels, according to the report. That leaves smaller operators at risk of falling behind if they cannot connect their reservation, property management and service systems to support automated decision-making.

The report identifies Retrieval-Augmented Generation and Model Context Protocol as two building blocks for that shift. The first is designed to improve the accuracy of AI responses by drawing on current hotel information, while the second enables AI agents to interact directly with live property management and reservation systems.

Connected systems

The final theme is the need to reduce operational fragmentation. Cloudbeds says 67% of independent hotels still cite managing separate systems as a major challenge, with properties losing the equivalent of one to two working days a week reconciling data across platforms.

The issue becomes more pressing as AI tools move into booking, service and pricing, because disconnected data limits what automation can do. The report argues for what it calls "revenue marketing", in which pricing, distribution and promotion are managed from a shared database rather than in separate silos.

Adam Harris, Chief Executive of Cloudbeds, said the findings show a growing performance divide across the sector. "2025 told many different stories for independent hotels, and that divergence is only the beginning," Harris said. "Independent operators possess structural advantages, agility, character, and community connection that no brand can replicate. The question is whether they can harness those advantages through connected strategy, unified systems, and disciplined operations before the performance gap widens further."