The 2025 Hotel Labor Costs & Trends report was released on HotelData.com by Actabl, revealing how U.S. hotels have tightened labor models throughout the year to offset rising wages, higher operating costs, and revenue performance that consistently fell short of expectations.
The report shows that even as wages rose by up to 5.9 percent, labor cost per occupied room rose between 2 percent and 11.2 percent, and headcount grew between 4 percent and 9 percent, operators protected margins by cutting hours per occupied room and driving major gains in labor efficiency. From January to September, hours per occupied room dropped 7-15 percent in guest services, housekeeping, and management, while productivity increased for most frontline and leadership roles.
These efficiency gains came as top-line results lagged projections. Hotels had set aggressive targets for 2025, expecting room revenue budgets to grow 14.1 percent year over year in the first nine months, even as they anticipated ADR would decline between 1.9 percent and 2.4 percent.
These results demonstrate how hotels maintain profitability through enhanced labor productivity, improved forecasting, and optimized staffing based on demand. The 2025 Hotel Labor Costs & Trends report draws on aggregated data from thousands of hotels across the U.S. utilizing Actabl’s operational and financial platforms.
“Labor defined hotel performance more than any other cost category in 2025,” Sarah McCay Tams, head of research at Actabl, said in a statement. “Operators entered the year expecting strong revenue, but softer top-line results and rising labor costs forced a new level of discipline. What stands out is how hotels improved productivity without cutting teams, instead using forecasting, cross-training, and scheduling accuracy to protect margins in a challenging environment. Labor efficiency is now as important as rate strategy. In 2026, the hotels that outperform will be those that connect labor directly to demand and deploy staff dynamically.”
Key Findings
- Hours per occupied room fell across all major departments
- From January to September:
- Guest Services HPOR decreased 13.5 percent
- Housekeeping HPOR decreased 7.1 percent
- Management HPOR decreased 14.6 percent
- Hotels cut hours while preserving service delivery, reflecting better demand alignment, cross-training, and refined staffing plans implemented mid-year.
- From January to September:
- Position-level productivity improved as well
- Minutes per occupied room (MPOR) improved within 2025 across front-line and leadership roles:
- Room attendants: 5.5 percent faster
- Guest service representatives: 12.7 percent faster
- AGMs + GMs: ~14 percent faster
- Overall, MPOR dropped 9 percent across evaluated roles.
- Minutes per occupied room (MPOR) improved within 2025 across front-line and leadership roles:
- Wages rose, but smarter deployment softened the impact
- Average wages increased 3.7 percent to 5.9 percent year over year, and cost per occupied room rose 2 percent to 11 percent. Operators limited margin erosion because they optimized shift structure rather than reducing headcount.
- Average wages increased 3.7 percent to 5.9 percent year over year, and cost per occupied room rose 2 percent to 11 percent. Operators limited margin erosion because they optimized shift structure rather than reducing headcount.
- Headcount increased, demonstrating stability, not cuts
- Hotels grew headcount 9 percent through the summer and maintained 4 percent higher staffing levels than January, using overtime as a controlled buffer for demand rather than a runaway expense.
Access the Report
Visit HotelData.com to read the 2025 Hotel Labor Costs & Trends report.
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