Last month, members of the TCRM executive team attended the Hotel Data Conference in Nashville. As always, the conference provided plenty of data to digest, but several themes stood out. While the overall outlook for the hotel industry has improved considerably since the beginning of the year, that doesn’t mean operating hotels has suddenly become easier.
Costs continue to rise. Booking windows remain compressed. Owners are focused more than ever on profitability. And Revenue Managers are being asked to make pricing decisions with less clarity about future demand.
In other words, sometimes you simply have to hold your nerve.
Occupancy Still Creates Pricing Power
One of the more interesting reminders from the conference was the relationship between occupancy growth and ADR growth.
It sounds simple, but it is important: rate tends to follow demand. According to executives speaking at the Hotel Data Conference, demand growth and rate growth are strongly correlated across hotel classes. When demand increases, hotels generally gain greater pricing power.
That’s particularly important when we look at group business.
Group demand has strengthened considerably in 2026. Through June, U.S. group demand was up 2.4% year over year, reaching approximately 129 million room nights. Convention calendars and group compression are also contributing to ADR growth in both primary and secondary markets.
Why does that matter to transient pricing?
For hoteliers, the relationship between group occupancy and transient pricing is well understood. A strong group base creates compression, giving revenue teams greater opportunity to push transient ADR as remaining inventory tightens.
What stood out at HDC was the importance of group occupancy growth in the current environment. As group demand strengthens, it provides an increasingly important foundation for transient rate growth. That makes continued attention to group pace particularly important—not simply as a measure of group performance, but as an indicator of how much pricing power may develop in the transient segment as arrival dates approach.
Group and transient strategy have always been interconnected. In the months ahead, the strength of that group base may be one of the more important factors determining how aggressively hotels can hold and grow transient rates.
The Booking Window Has Changed
Of all the data shared at the conference, one statistic should grab every revenue manager’s attention: roughly one-fifth of hotel bookings now occur within one week of arrival. This data may be influenced by FIFA World Cup bookings, which saw a lot of last-minute bookings. However, the fact remains that booking windows have shrunk.
Think about what that means when you are looking at a hotel three or four weeks out. You may be behind last year. You may be below forecast. You may have a significant number of rooms left to sell.
And everyone starts getting nervous. The natural reaction is often to lower rates.
But today’s booking behavior requires a different mindset. Business that once materialized 30, 45, or even 60 days before arrival is increasingly arriving much later. STR noted that some group booking windows that traditionally ran 30 to 60 days have compressed to just two or three weeks. Revenue leaders speaking at HDC also emphasized how much business can now materialize within the final two weeks.
The World Cup provided an extreme example. In some markets, significant occupancy was booked only three or four days before arrival, even though travelers had known about the event months or years in advance.
That makes revenue management professionals more uncomfortable. It also makes good revenue management more valuable.
Empty Rooms Are Not the Only Thing That Costs Money
When occupancy looks soft, discounting can feel like the safest option.
Drop the rate. Generate some additional bookings. Improve occupancy. Problem solved, right? Not necessarily.
Every occupied room has a cost attached to it. Housekeeping expenses, labor, utilities, amenities, supplies, distribution costs, and, depending on how the reservation was acquired, potentially a significant commission.
That becomes even more important today because hotel operating costs remain elevated. STR reported at HDC that although hotel revenue growth finally began outpacing expense growth earlier this year, GOP margins are still expected to decline in 2026. Inflation-adjusted GOP per available room also remains below 2019 levels.
So filling another room isn’t automatically the same as making more money. Discounting can absolutely increase occupancy. But if the additional rooms are acquired at a lower ADR — particularly through a high-cost distribution channel — the hotel may generate more work and more occupied rooms without producing more profit.
This is where the conversation needs to shift from “How full can we get?” to “What is the most profitable business we can capture?”
Sometimes the Best Revenue Decision Is to Wait
None of this means hotels should never discount. There are legitimate reasons to use promotions, fenced offers, targeted discounts and other pricing strategies.
The key word is strategy.
Reducing rate simply because occupancy looks uncomfortable three weeks out is not a strategy. Before reacting, revenue teams should understand their normal booking curve. Look at recent pickup. Look at the day of the week. Look at group pace. Look at market compression. Look at competitive pricing. And, importantly, understand how much business historically arrives inside of three, seven, and fourteen days.
If 20% of your business is still waiting to book, pricing decisions made too early can leave a lot of money on the table. Revenue management has always involved balancing occupancy and rate. What has changed is how much fortitude it now takes to do it well.
With shorter booking windows, improving group demand, and continued pressure on hotel profitability, the temptation to react quickly will remain. Sometimes the smartest thing a revenue manager (and revenue team) can do is resist that temptation.
Know the data. Understand the booking patterns. And when the demand indicators support it, hold your nerve and protect the rate.