Budget season always involves some degree of forecasting. For hotels heading into 2027, though, simply taking this year’s marketing budget and adding a few percentage points may not be enough.
The industry is entering the new year with a mixed outlook. CoStar and Tourism Economics currently forecast U.S. hotel RevPAR growth of 2.1% in 2027, following a stronger 4.4% increase projected for 2026. ADR is expected to grow 1.6%, while demand rises 1.1%.
Those numbers point to continued growth, but at a more moderate pace. They also come as hotels contend with persistent operating costs and changing traveler behavior.
That makes the 2027 budgeting conversation less about spending more across the board and more about deciding where marketing dollars can have the greatest impact.
Start With What Will Be Different in 2027
One of the biggest budgeting mistakes a hotel can make is assuming that performance from one year will carry over to the next. We live in dynamic times, and things happening across the street or across the globe can have an impact on your hotel’s performance.
For some properties, 2026 included demand tied to major events such as the FIFA World Cup and America 250. As hotels build their 2027 budgets, the more important question is what will replace that event-driven demand and where marketing may need to work harder to fill the gap.
CoStar recently recommended that hotels specifically normalize their 2026 performance by month and segment when developing 2027 budgets. The publication notes that World Cup host markets saw significant rate premiums around match dates, creating comparisons that could distort next year’s expectations.
Hotels should also look beyond topline revenue. AHLA has continued to flag rising labor, insurance, energy, and supply expenses as significant pressures for hotel owners. Marketing will face the same scrutiny as other departments, which makes the ability to connect spending to revenue increasingly important.
Instead of asking, “What did we spend last year?” start with a different question: “What business challenges will marketing need to help solve next year?”
That might mean supporting need periods, building awareness in a new feeder market, increasing direct bookings, generating group leads, or reducing reliance on expensive third-party channels.
Your budget should follow those priorities.
1. Protect a Budget for Need-Period Marketing
Not every marketing dollar needs to be committed before January 1. Hotels should consider setting aside part of their 2027 budget specifically for tactical campaigns that can respond to actual performance throughout the year.
If a particular month begins pacing behind expectations, marketing can deploy geographically targeted campaigns in high-potential drive or feeder markets rather than relying on a generic promotion. Paid search and social campaigns can also support specific dates, packages, or audiences where additional demand is needed.
This is especially important as booking behavior continues to shift. CoStar notes that some traditional group lead times have compressed dramatically, with bookings that historically arrived 30, 45, or 60 days out sometimes materializing only two or three weeks before arrival.
A completely fixed annual campaign calendar makes it harder to respond to those changes. Build flexibility into the budget so marketing and revenue management can act together when the data shows an opportunity.
2. Invest in Being Discoverable Before the Traveler Reaches an OTA
Hotel discovery is changing quickly. Travelers increasingly move among traditional search engines, social platforms, maps, review sites, AI tools, and OTAs as they research a trip. AI-powered search adds another layer to that journey.
For 2027, hotels should evaluate whether enough of their marketing budget supports the content and digital infrastructure that makes the property discoverable throughout that research process.
That could include improving destination and experience content on the hotel website, strengthening local SEO, keeping listings accurate, earning quality mentions from relevant third-party websites, and developing content that answers the specific questions travelers ask when planning a trip.
AI visibility deserves particular attention. Recent industry analysis suggests AI tools are becoming an increasingly important hotel discovery channel, even though travelers remain more hesitant to let AI complete the booking itself.
This creates an opportunity: marketing can help get the hotel into the consideration set, while the hotel’s website and booking experience turn that interest into direct revenue.
3. Budget for Value, Not Automatically for Discounts
Price sensitivity still influences travel decisions.
An AHLA survey released this summer found that 57% of Americans believe travel costs more than it did last year. Travelers are responding by staying closer to home, taking road trips, and seeking hotels that provide added value.
Interestingly, travelers reported being more likely to cut spending on shopping and dining before reducing spending on accommodations. Hotels can use that insight to shape 2027 offers without immediately cutting rates.
Consider budgeting marketing support around packages that increase perceived value. A resort might pair accommodations with an experience guests would otherwise purchase separately. An urban hotel could promote parking, breakfast, late checkout, or food-and-beverage credits to nearby drive markets.
Marketing and revenue teams should determine together which inclusions are both attractive to guests and financially sensible for the property.
Independent and Branded Hotels Should Budget Differently
The right allocation will also depend heavily on the type of hotel.
Branded properties benefit from resources that independent hotels simply don’t have at the same scale. Major brands bring established recognition, loyalty programs, national campaigns, technology platforms, and substantial investments in search and digital media.
That doesn’t mean branded hotels can leave everything to the flag. Property-level marketing should fill the gaps that brand marketing cannot. A 2027 budget might place greater emphasis on local partnerships, need-date campaigns, property-specific experiences, group and event opportunities, and content that differentiates the individual hotel within the brand portfolio.
Independent hotels have a different challenge. They may compete against brands with far larger marketing budgets and established loyalty ecosystems, so trying to match them channel for channel is rarely realistic.
Instead, independents need to be especially selective. Their advantage is specificity. An independent property can build its marketing around the neighborhood, its people, distinctive experiences, local partnerships, and stories that would be difficult for a national brand to replicate. That content can support organic search, AI discovery, social media, PR, email, and direct booking efforts at the same time.
Recent analysis of AI hotel discovery suggests that while chains currently have advantages in some technical signals, independent hotels can compete through detailed, distinctive content that gives AI systems stronger reasons to recommend them.
For an independent hotel with limited resources, a smaller number of well-supported priorities will usually outperform spreading a modest budget across every available channel.
Make Measurement Part of the Budget
One final line item is easy to overlook: measurement itself.
If hotel teams want to defend marketing investments in 2027, they need reliable ways to understand what those investments produce.
That means ensuring the necessary analytics, tracking, reporting, CRM, and attribution tools are in place before campaigns begin. Marketing and revenue teams should also agree on the metrics that matter.
Clicks and impressions can provide useful context, but they shouldn’t be the final measure of success. Look at booking revenue, cost of acquisition, conversion rates, lead generation, channel mix, and performance during the need periods a campaign was designed to support.
The goal is to make the connection between marketing activity and commercial performance easier to see. Your hotel may be full, but did you actually make money?
Build the Budget Around the Business
No universal percentage applies to every hotel in 2027.
A newly opened independent property trying to establish awareness has very different needs from a branded hotel with strong base demand. A resort dependent on leisure travelers faces different challenges than an urban hotel pursuing corporate and group business.
Start with the hotel’s business objectives and work backward. Identify where demand needs to come from. Look closely at the periods where performance needs support. Understand which audiences offer the strongest opportunity, then determine which marketing investments are most likely to reach them.
With slower industry growth forecast for 2027 and expenses still under pressure, every dollar will face more scrutiny. A thoughtful marketing budget gives hotels the flexibility to respond to demand while continuing to invest in the channels that build long-term visibility and direct revenue.