Hotels used fewer labor hours per occupied room and operated with slightly leaner staffing levels during the first quarter, according to the Q1 2026 Labor Costs Report from HotelData.com. While labor costs continued to rise, productivity improved across key departments, contributing to stronger profitability performance across the industry.
The report shows labor cost per occupied room (CPOR) increased 1.8% year over year, rising from $45.96 in Q1 2025 to $46.79 in Q1 2026. At the same time, hours per occupied room (HPOR) declined 2.3%, indicating that hotels used fewer labor hours to service each occupied room.
The findings represent a notable change from the labor trends seen in late 2025 when wage growth accelerated faster than productivity gains and labor costs placed increasing pressure on hotel profitability. In Q1 2026, operators improved productivity in several key departments, including housekeeping, guest services, and management while running with slightly leaner staffing levels.
The data suggests many operators achieved those gains through tighter labor deployment and stronger task standardization rather than workforce expansion. Hotels used fewer labor hours per occupied room even as wages continued to increase, helping contain labor cost growth. These trends contributed to the stronger profitability performance reported during the first quarter.
The Q1 2026 Labor Costs Report draws on aggregated data from thousands of U.S. hotels using Actabl’s Hotel Effectiveness labor optimization platform.
“Hotels entered 2026 facing many of the same labor challenges they managed throughout 2025,” said Sarah McCay Tams, head of research and editorial, Actabl. “The first quarter data shows operators are improving productivity and deploying labor more efficiently as wage pressure continues. As we look toward the rest of 2026, that kind of labor discipline will become even more important if revenue growth becomes less predictable.”
Key findings
Key operational departments posted productivity gains
- Housekeeping HPOR improved 3.6%
- Guest Services HPOR improved 1.9%
- Management HPOR improved 2.4%
Hotels improved efficiency while operating with leaner teams
- Average headcount declined 1.2% in full-service hotels and 1.4% in select-service hotels
- Hotels improved productivity without adding staff
Labor cost growth remained manageable
- Labor CPOR increased 1.8% year over year, from $45.96 to $46.79
- Wage growth remained steady at 2.9% among all tracked hotels
Hotels used fewer labor hours per occupied room
- HPOR declined 2.3% year over year
- Labor hours fell even as wage rates continued to rise
Select-service hotels posted the strongest efficiency gains
- HPOR declined 4.2% in select-service hotels
- Full-service hotels improved HPOR by 2.3%
Housekeeping productivity continued to improve
- Room attendant MPOR improved 4.3%, falling from 24.99 to 23.91 minutes
- Select-service room attendant productivity improved 7.2%
What the Q1 labor data signals for the rest of 2026
The report highlights four labor trends hotel operators will need to navigate throughout the rest of the year:
- Productivity gains will need to continue. Improved labor efficiency offset wage pressure and support profitability in the first quarter. Maintaining those gains will become increasingly important if revenue growth slows later in the year.
- Wage pressure eased but didn’t disappear. Labor cost growth was more moderate than the spikes seen in late 2025. However, labor costs continued to rise within hotel operations
- Hotels will have less room to absorb labor costs. If revenue growth slows, operators will need to align staffing levels more closely with demand to maintain margins and operational performance.
- Housekeeping will remain a frontline pressure point. While productivity improved during the first quarter, overtime increased among several key housekeeping roles. This suggests that operators may still need additional flexibility as demand patterns shift.
