At this year’s Hotel Data Conference everyone wanted to talk about AI; but almost nobody wanted to talk about the same AI. Sit down with an operator in the hallway and the conversation was about margin discipline and managing rising undistributed expenses. Sit in a main-stage session and it was all about channels and booking.
That gap is the real story of HDC 2026. Three things stood out to me this year — one from what wasn’t being said on stage, two from sessions I sat through. Put together, they tell a pretty coherent story: the industry has more data, more demand, and more guest goodwill than it’s had in years, and yet, margin defense is still more important than ever.
What surprised me was that back of house AI is still not a main stage conversation, while conversations with revenue and finance leaders revolved around chasing down numbers across half a dozen systems and still being uncertain about which numbers to trust.
“Behind the Data” session on data fragmentation put some real numbers behind what those conversations kept circling back to. A separate survey of nearly 100 hotel owners and operators, conducted by Otelier, Agilysys, and Sage as part of the 2026 Hotel Operations Index, confirmed what a lot of us already suspected: hotel technology stacks are expanding faster than they’re connecting.
None of that surprised me. What did stop me mid-note-taking was the AI readiness number: 40% of operators say they’re not ready at all to adopt AI for operational efficiency, and cost and ROI uncertainty is cited as the top barrier.
Perhaps it is because you can’t get reliable output from an AI model sitting on top of unreliable, disconnected inputs — and evidently, most operators already know that.
This is the conversation I wish had gotten more stage time. Every guest-facing AI tool showcased at HDC this year ultimately depends on operational data that, by operators’ own admission, is scattered across a dozen systems and only trusted by 15% of the people relying on it. And yet front-of-house AI is the visible layer everyone wants to demo. Back-end data consolidation is the foundation it’s built on — and right now, based on what I heard from operators all week, that foundation is uneven at best.
The lack of confidence in back of house data also explains a lot of what came up in two other sessions I sat in on.
I sat in on the “Bottom-Line Revolution” session and got some good news on top-line revenue. But the number I walked out with was this one: through May 2026, year-to-date room revenue is up 8.9% year-over-year — a record high — and yet GOP margin still sits at 40.4%, the weakest of the past four years.
The headline numbers do look strong. U.S. room demand turned positive in early 2026 after nearly a year of declines. ADR growth (up to nearly 7% year-over-year by June) has finally outpaced inflation for the first time in this cycle. Revenue growth is outpacing expense growth for the first time in years, which is genuinely good news — and departmental profit is up 4.65% YTD against expense growth of just 3.65%.
But that improvement isn’t fully reaching the bottom line, and this was the part several operators I talked to afterward kept coming back to. Department profit margin, at 61.8%, is still below where it stood in 2024.
Undistributed operating expenses — the admin, sales and marketing, maintenance, and utility costs that sit above the department level — are rising faster than almost anything else, up as much as 6%+ year-over-year, eating into the gains departments are generating.
My read: this isn’t a demand problem anymore. It’s an efficiency and expense-discipline problem, and it’s concentrated specifically at the undistributed level — which is exactly the layer of the P&L that’s hardest to see clearly when your data is spread across seven-plus disconnected systems.
The JD Power panel, “Transform Reviews Into Results,” was probably the most upbeat room I sat in all week, and deservedly so: guest satisfaction is up across every single hotel segment for the second consecutive year, from Economy to Luxury.
Brand consistency continues to track closely with guest trust, and hotels across the board are closing gaps on the “table stakes” guests expect — cleanliness, front desk courtesy, Wi-Fi quality, F&B — with full-service and limited-service properties both showing steady multi-year gains. I talked to a few revenue managers afterward who were genuinely energized by those numbers, and I don’t blame them.
The question I kept turning over on the drive home wasn’t “are guests happier” — the data says clearly, yes. It was “now what.” Rising satisfaction scores are a leading indicator, not a result. The hotels capturing the benefit are the ones actively aligning guest sentiment with their competitive rate position. Only with comprehensive business intelligence unifying these previously siloed data streams can operators see the clear, data-backed path from a happy guest to a stronger bottom line.
Look at the sessions together and a pattern emerges that no single speaker stated outright, but that I think ties the whole conference together: hospitality has more data, more demand, and more guest goodwill than it’s had in years, yet it still struggles to convert any of it cleanly into margin.
In this way, the story of 2026 has not changed since ALIS in January, despite rosier forecasts.
Operators can’t fight undistributed expenses without clean cross-departmental data. They can’t fully capture the AI opportunity everyone was demoing without first fixing the fragmentation sitting underneath it. And they can’t turn rising guest satisfaction scores into revenue until it’s tracked along-side rate and guest spend.
This is why the most forward-thinking operators are no longer trying to patch together disparate systems. They are meeting this challenge head-on by migrating their operations to a unified back office system, a hospitality-specific ERP. By consolidating their back office tech stack, they are securing the clean, trusted, and cross-functional data foundation required to actually control undistributed expenses, operationalize guest sentiment, and have clean data for AI to move from AI theory to real, margin-driving results.
Chris Hall has over 35 years of experience in the hospitality industry, in both operations and sales roles. The last 10 of which were selling hospitality specific Saas directly to hotel companies.
He has held a variety of operations roles throughout the United States with John Q Hammons Hotels, InterContinental Hotels Group, Radisson Hotels and Hilton Hotels & Resorts.
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