From volatility to resilience: strategic priorities for hotel owners and operators

Withers and the Energy & Environment Alliance ('EEA') hosted their annual roundtable on 4 June 2026 bringing together hotel owners, operators, lenders, and brokers to discuss the latest strengths and challenges of the hospitality sector. 

David Rea, Global Director of Macro Research & Chief Economist EMEA at Jones Lang LaSalle ('JLL'), opened the discussion with a thoughtful exploration of the sector against the backdrop of current economic headwinds.

Some of the key talking points from the evening are set out below. 

Macro, rates and implications for hotels

The defining feature of today's operating backdrop is not constant crisis, but persistent Volatility, Uncertainty, Complexity and Ambiguity — VUCA is no longer episodic; it is the baseline. Recent shocks, from COVID to Ukraine, tariffs, US political volatility and the Iran conflict, differ in origin but share highly correlated economic transmission mechanisms. 

The implication is clear: the advantage does not come from predicting the next shock, but from separating signal from noise and responding in a disciplined, data-driven way. Long-term trends have not fundamentally changed, but readiness and adaptability matter more than ever. 

The Iran conflict: Dominant narrative, contained impact

The Iran conflict has dominated the global macroeconomic narrative, yet its economic impact after three months has been more muted than many expected. Two factors matter most: the extent of physical damage to energy and shipping infrastructure, and the duration of disruption to shipping through the Strait of Hormuz. Despite shipping flows being effectively halted since early March, markets have continued to assume the disruption is temporary. 

The announcement of a 60-day peace deal lessens uncertainty but does not remove it. If the Strait re-opens as a result, it will still take months for shipping, production and trade to fully normalise. A downward hit to growth and an upward hit to inflation can be expected to persist throughout H2 2026. 

Energy prices have risen sharply but remain well below historic crisis peaks in real terms. Several buffers have absorbed the impact: large-scale oil reserve destocking, strategic reserve releases and increased production from other global suppliers. Gas prices tell a similar story — higher, but far from the crisis levels seen after Russia's invasion of Ukraine. 

Much of the cost shock has, for now, been absorbed through margin compression rather than passed through to end prices. Governments have also cushioned the impact through energy tax cuts and increased subsidies. The result is a delay in economic pain rather than its elimination. 

Implications for hotels

Hotels are often viewed as a natural inflation hedge. That might remain broadly true, but only up to the point where consumers can absorb higher prices. With household budgets under pressure, pricing power is more constrained in the short term. 

Booking windows have narrowed significantly in the face of broader economic and geopolitical uncertainty. With less forward business on the books, operators are finding it difficult to push through meaningful price increases without clear visibility on demand. 

That said, structural demand remains intact. Travel and hospitality have seen a structural increase in their share of household spending, and the desire to spend on experiences has not diminished. The current environment represents cyclical stress layered on top of strong long-term fundamentals. 

Hotels nonetheless face a particularly challenging cost equation. Energy, food inputs, labour and financing costs sit largely outside management control. When those costs rise quickly rather than gradually, operational pressure escalates rapidly — a challenge not unique to hotels, but one the sector feels acutely. 

AI and the longer-term outlook

Over time AI should support productivity, income growth and new patterns of consumer spending. While it does not resolve today's cyclical pressures, automation, improved forecasting and better resource allocation should help operators take friction out of operations over time. 

On the demand side, AI-driven transparency will reshape competition. As consumers gain better information and comparison tools, quality will matter more. Stronger hotels should find it easier to stand out and reach the right customer, creating greater potential to exert pricing power even in a more uncertain demand environment. 

Conclusion: Adaptability as the core competitive advantage

What is striking is how little the required response has changed over recent years. The strategies developed in response to the pandemic, Ukraine, tariffs and energy shocks are the same ones needed today. VUCA is the new norm; the task is to separate signal from noise, monitor risks actively and maintain credible business continuity plans. 

Three priorities stand out for hotel owners and operators navigating this environment:

• Adaptability — flexibility, agility and optionality must be built into decisions; this is not an environment for rigid, long-dated commitments. 
• Supply chain resilience — greater transparency, redundancy and multi-supplier models are essential, with energy security and sustainability remaining particularly critical in the UK and Europe. 
• Cost discipline — capital, labour and energy are no longer cheap. Cost management, energy efficiency and data-driven decision-making are no longer tactical responses; they are core strategic priorities. 

This is a challenging environment, but it is navigable. The spoils will go not to the most optimistic, but to the most prepared and adaptable.