Good morning. Today, we’re learning about why and how technology fails — and how to avoid that. And a new report from HotelData.com shows hotel labor costs rose 12.8% per occupied room in 2025, with the biggest increases happening in Q4.

Congrats to Paul Nisbett on his promotion to global CFO at Valor Hospitality Partners, Michael Hoe Knudsen on his appointment as managing director for Mexico, Latin America, and the Caribbean at IHG, and Andrew Hougton on joining Davidson Hospitality Group as SVP of luxury operations.

Josiah speaks with Mark Fancourt of TRAVHOTECH about what hotel leaders often misunderstand about technology strategy and why buying the right tool is only the beginning. This is timely, as today's briefing features stories on AI booking, labor trends, and loyalty platform shifts, all raising the same question: are hotels actually seeing returns on their tech investments?

All-inclusive travel has crossed from niche to mainstream, with 87% of consumers having stayed or considered staying at an all-inclusive resort, according to a new Skift survey of 2,206 U.S. and Canadian travelers. Six in 10 say they're more likely to book all-inclusive than five years ago, and 84% of those who've tried it are repeat guests. The generational data is striking: 42% of Gen Z and 33% of Millennials stayed all-inclusive in the past year, far outpacing older cohorts. When asked what "well-being" means on vacation, travelers ranked relaxation (70%) and quality sleep (59%) far above physical fitness (29%), suggesting resorts should think beyond spa menus and into the full experience of feeling rested and recharged. Read more on Skift

The Beverly Hills Hotel is adding five new public spaces, including a supper club, cocktail bar and terrace, an indoor/outdoor lounge, a screening room, and a private dining room, with Ken Fulk of Ken Fulk Inc. as creative director. Hotel operator and advisor Bashar Wali framed the move: "Most hotels fight for RevPAR. The Beverly Hills Hotel is building a destination that happens to have rooms. Social infrastructure first." Read more from Bashar Wali

U.S. hotel labor costs rose faster than productivity gains in 2025, with wage cost per occupied room climbing 12.8% to $48.32, according to a new report from HotelData.com based on data from nearly 5,000 hotels using Actabl's Hotel Effectiveness platform. The pressure accelerated late in the year: Q4 wage CPOR surged 21.1% year-over-year as wage growth hit 5.9% and total labor hours per occupied room increased 4.4%. Earlier in 2025, operators had managed to cut hours per occupied room by 7-15% in housekeeping, guest services, and management, protecting margins despite rising pay rates. But those efficiency gains eroded as the year progressed, and the report flags three priorities for 2026: integrating forecasting directly with labor scheduling, investing in task-level productivity tracking, and rethinking staffing models as wages remain elevated and demand plateaus. Read more via HotelData.com

Martin Soler's ITB Berlin recap highlights a widening gap between how hotel tech companies pitch investors and what customers actually need. "Adding 'AI' to your story is a requirement to attract funding," Soler writes, "but investors and customers are not the same audience. Customers care about one thing: does it solve their problem?" He noted the most practical AI applications at the show were in revenue management and analytics, while platform consolidation continues, with more companies building all-in-one solutions that are increasingly hard to distinguish. His sharpest question: with roughly 70,000 revenue managers globally, why hasn't pricing been fully automated yet? Read more via Martin Soler

San Francisco's two largest distressed hotels, the 1,919-room Hilton Union Square and the Parc 55, sold for a combined $408 million, a 75% discount from their $1.56 billion appraisal in 2016. Court-appointed receiver Michelle Russo of HotelAVE oversaw the sale after Park Hotels & Resorts stopped making loan payments on $725 million in debt in 2023. New York-based Newbond and Conversant assumed the mortgage loan in a deal named "transaction of the year" at ALIS. In a new CoStar interview, Russo described the nearly 3,000-room properties as "beasts of assets" and expressed optimism about San Francisco's recovery, pointing to strong citywide group business growth in 2025 and the city's Super Bowl boost. Investor sentiment, she said, is the most positive it's been since the pandemic-era crash. Read more on CoStar | Listen to the CoStar podcast