After Growth, Performance Matters in 2026

I hope this newsletter finds you well. I would like to thank everyone who has subscribed and supported me throughout 2025. You know who you are, and I am genuinely grateful for the trust, encouragement, and conversations along the way.

As 2025 comes to a close, hospitality feels less like an industry in recovery and more like one trying to redefine itself after a structural reset. In many ways, this was inevitable given the focus we have seen on growth through acquisition and brand expansion. What continues to surprise me is how little corporate attention is still being paid to the fundamentals of existing operations, even as leaders manage larger portfolios with fewer people and tighter margins. Without naming names, there are hotel brands today that no longer consistently deliver the experience they promise.

This is something we see regularly through our work at Captivate. The gap is rarely ambition or brand intent. It is execution. Strong operations, particularly in food and beverage, are still not being given the same priority, structure, or support as the rooms side of the business, despite their direct impact on guest experience, profitability, and reputation.

In practice, this has created unavoidable trade-offs. Short-term headcount cost savings have come at the expense of earned operational expertise and leadership depth. Branded hotel expansion and marketing have often been prioritised over consistent operational delivery at venue and hotel F&B level. In many markets, continued portfolio growth has taken precedence over optimising performance, even where growth conditions remain favourable to do so.

Across the industry, many corporate roles no longer exist. I have seen genuinely strong top talent exited, often these people have long tenure and deep operational knowledge. This increasingly feels less like strategic repositioning and more like blunt cost-cutting measure, particularly within food and beverage. Like many of you, I still hope for the day when hotel food and beverage receives the same level of attention, investment, and leadership focus as the rooms side of the business.

It is also clear that hotel leadership recruitment approaches are still not working. There are fewer senior roles and many of the hiring processes lack transparency and clarity. This is not anecdotal. ONS labour market figures show that payrolled employees in accommodation and food services fell by 4.1 percent year on year in August, dropping from 2,174,759 in August 2024 to 2,085,155 in August 2025. At the same time, LinkedIn Sales Navigator shows a sharp rise in newly formed food and beverage consultancies. Some of this is forced, some strategic, and some driven by people choosing to step off the hamster wheel. What this points to is a breakdown in traditional career paths and a shift towards creating leadership value outside corporate structures, largely because the roles are no longer there.

STR data adds further context. Industry performance continued to recover through 2025, but unevenly by market. Looking ahead, STR and Tourism Economics forecasts for 2026 suggest modest rather than accelerated growth, with US occupancy expected to sit around 62 percent, ADR growth close to 1 percent, and RevPAR growth below 1 percent. This is not a picture of decline, but one of tighter margins and slower growth. In this environment, execution matters more than ever. This is where structured operational reviews add real value by clearly identifying what is working, where performance is being lost, and what practical changes will make a measurable difference.

Against this backdrop, demand from customers for more meaningful, experience-led events continues to rise. Hotels that are responding well to this are winning market share. This is not about doing more, but about doing the right things well and delivering experiences that guests genuinely value.

Despite the disruption, the opportunity still sits firmly within the triple bottom line. Sustainability is no longer a side conversation or a brand exercise. It is increasingly a commercial pillar. When applied properly, it improves margins, reduces risk, and supports long-term viability. This is evident not only in operations, but also in how hotels think about OS&E and FFE, from specification and sourcing through to lifecycle cost and waste reduction.

Looking ahead to 2026, Europe and the USA are likely to remain challenging. Cost pressure, asset performance, and cautious investment will continue to shape decisions. In contrast, the UAE and KSA still appear well positioned to prosper. Hospitality remains a strategic growth sector for many economies, with investment flowing to projects that demonstrate clear purpose and scale.

The number of hotels currently for sale cannot be ignored. It suggests some owners believe hospitality as an asset class has peaked and are choosing to realise value now, while others may be positioning ahead of a correction in property values. Either way, the next phase of hotel ownership will demand clearer thinking, stronger fundamentals, and more disciplined decision-making.

For Captivate, 2025 has been a stronger year, particularly towards the end. The work has become more focused, the conversations more commercial, and the outcomes more measurable. As we move into 2026, the direction is clear. Expanding further into sustainable OS&E and FFE is a natural extension of our operational and sustainability work and reflects what owners are increasingly asking for.

As we head into 2026, transparency, execution, and consistency will matter more than noise, intent, or scale alone. The hotels that perform best will be those that strengthen what they already have, listen and respond closely to customer demands, and make measured decisions across operations, people, and investment.

If any of the points in my article resonate with you, or if you are looking for an honest, practical review of how your operation is really performing across food and beverage, sustainability, or asset readiness, I would welcome the conversation. Wishing you all a successful, grounded, and well-executed 2026.

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