Insight from HALL Structured Finance: Hotel Financing Trends from ALIS 2026

Performance Is No Longer Market-Driven Alone

One of the clearest messages from ALIS was that broad market lift is no longer enough to ensure success. Industry data shared during the conference showed that only a subset of hotels achieved meaningful growth last year. The implication is straightforward: asset-level execution matters more than ever.

Ferguson noted, “What stood out to me is that operators who truly know their asset, understand their guest, and stay flexible are still finding ways to outperform, even when the broader numbers look flat.” For entrepreneurial owners, hands-on management, operational discipline, and clear strategy are increasingly as important as location or brand.

Capital Is Available, but More Selective

From a financing standpoint, ALIS conversations validated what we see every day working with small and mid-sized hotel sponsors. Rising operating expenses, higher insurance costs, and tighter underwriting standards are pushing lenders to be more cautious and more inquisitive.

“Capital is still available, but it’s more thoughtful and more selective,” Yamauchi shared. “As lenders, we want to understand the story behind the deal, not just the pro forma.”

This environment rewards preparation and credibility. Sponsors who can clearly articulate how they operate, where they are investing, and how they plan to manage risk are standing out. This is exactly where HSF’s process adds value, by helping sponsors refine assumptions, stress-test business plans, and approach lenders with clarity and transparency early in the process.

Opportunity for Entrepreneurial Sponsors

Looking ahead to 2026 and beyond, the outlook discussed at ALIS was cautiously optimistic. Demand fundamentals remain solid, even as uncertainty around costs and capital persists. For entrepreneurial sponsors, this has created opportunity, particularly in repositionings, operational improvements, and selective acquisitions where institutional capital may hesitate.

“This is where smaller sponsors can really differentiate themselves,” Ferguson added. “They’re closer to the asset, faster to make decisions, and often more creative.” At HSF, we view our role as structuring financing solutions that align with these realities, capital that is realistic, flexible, and built to support long-term performance rather than short-term assumptions.

Limited New Supply Shapes the Next Cycle

Another notable undercurrent from ALIS was the sharp slowdown in new hotel construction. Higher development costs and tighter capital have significantly constrained pipelines, meaning fewer projects are breaking ground today.

“We kept hearing that very few new hotels are actually moving forward right now,” Yamauchi noted. “That creates a meaningful opportunity for sponsors who can structure deals carefully and stay disciplined during construction.” Ferguson added, “For developers who can navigate today’s environment, the payoff may be entering the market when demand has normalized and competitive supply is limited.”

At HSF, we believe this dynamic makes the current environment compelling, though deliberate, for new development and strategic investment. Success will depend on thoughtful structuring, conservative assumptions, and partners who understand both the asset and the capital markets. For well-prepared sponsors, the path forward remains challenging, but full of opportunity.