Hotel Labor Costs Report Reveals How Hotels Are Enhancing Efficiency in a Soft Revenue Market: What You Need To Know

Published on December 13, 2025

The 2025 Hotel Labor Costs & Trends report, released by HotelData.com by Actabl, sheds light on how U.S. hotels have adapted their labor models in response to rising wages and slower-than-expected revenue growth. The report shows how operators successfully protected margins by enhancing labor efficiency, tightening staffing models, and adjusting their operations to better align with demand.

The analysis reveals that despite a rise in labor costs, hotel operators managed to sustain profitability by improving productivity across key departments such as guest services, housekeeping, and management. This has been achieved through better forecasting, refined staffing practices, and cross-training staff to enhance efficiency without reducing headcount.

Improved Labor Efficiency as Key to Profitability

From January to September 2025, hotel labor efficiency saw significant gains, even as wages rose by 3.7% to 5.9%. The report highlights that hours per occupied room (HPOR) decreased across major departments, including guest services, housekeeping, and management, with reductions ranging from 7.1% to 14.6%.

Notably, guest services HPOR decreased by 13.5%, while housekeeping HPOR fell by 7.1%. Management HPOR saw a decrease of 14.6%, reflecting the industry’s push to optimize labor hours without compromising service quality. These efforts allowed hotels to respond to softer-than-expected revenue, with room revenue growth lagging behind initial projections.

Productivity Gains Across Staff Levels

The report also indicates that productivity has improved at the individual position level. Frontline and leadership roles, including room attendants, guest service representatives, and assistant general managers (AGMs), showed faster performance:

• Room attendants improved productivity by 5.5%.
• Guest service representatives became 12.7% faster.
• AGMs and general managers (GMs) worked 14% more efficiently.

Overall, minutes per occupied room (MPOR) dropped by 9% across evaluated roles, contributing to the improved labor efficiency that helped hotels protect margins in a challenging market.

Strategic Staffing Models to Protect Margins

Even as average wages rose by 3.7% to 5.9%, hotels were able to limit margin erosion by optimizing their staffing models rather than reducing headcount. Instead of cutting teams, operators strategically deployed staff based on demand, ensuring that they had the right number of workers at peak times.

Hotels also increased headcount by 9% during the summer, maintaining 4% higher staffing levels than in January. This increase was managed with controlled overtime, using it as a buffer for demand spikes rather than allowing it to become an uncontrolled expense.

The Role of Smarter Forecasting and Scheduling

The report underscores the importance of forecasting and scheduling accuracy in managing labor costs. Hotels that adopted smarter scheduling practices and enhanced cross-training were able to achieve significant labor efficiency gains. These improvements have made labor efficiency as important as rate strategy in maintaining profitability.

Hotels are now more focused than ever on aligning labor costs with demand, optimizing staffing levels and hours worked to ensure maximum productivity at all times. This shift in strategy is seen as a crucial factor for hotels aiming to thrive amid rising operational costs and fluctuating revenue.

Labor Efficiency as a Key to Future Success in the Hotel Industry

The 2025 Hotel Labor Costs & Trends report highlights how hotels are using innovative staffing and scheduling strategies to maintain profitability despite rising wages and soft revenue growth. By improving labor productivity and adjusting staffing models to better match demand, hotels are navigating the challenges of an evolving market.

As the hotel industry moves into 2026, operators that successfully integrate labor efficiency with dynamic staffing strategies will be better positioned to handle future challenges. By focusing on smarter workforce management, hotels can ensure they remain competitive and profitable while continuing to deliver high-quality guest experiences.