According to data from PwC’s U.S. Deals 2026 Midyear Outlook for hospitality and leisure, travelers are still spending but investors are narrowing their focus to a small set of assets.
While overall deal activity has slowed, a full 73 percent of hotel deals were centered around premium experiences, wellness-focused assets and businesses with strong customer data and AI capabilities.
Over the first half of the year, prices have risen and capital has gotten more cautious. Deal volume over the trailing six months is down approximately 2.5 percent from the prior six month trailing period, and the activity that is happening is heavily concentrated. Upscale, upper-upscale, and luxury accounted for 73 percent of hotel deals in the last six months—the highest concentration PwC has seen in two years.
This aligns with increased expectations for increased expectations on revenue available per room in these segments, with luxury RevPAR expected to rise 5.4 percent in 2026, upper-upscale 2.1 percent and upscale 2.7 percent. Earlier this year, PwC predicted an overall 0.9 percent increase in RevPAR for the industry and an average occupancy rate of 62 percent.
Deal value, on the other hand, has “exploded” as a result of the two large casino transactions announced in late May and early June. Even excluding these transactions, deal value has nearly quadrupled over this period, showing an increased appetite for “significant, transformative M&A” in the space—“for the right assets,” the report continued.
Driving Deals
New-build economics remain difficult to underwrite, as construction costs, financing costs and entitlement timelines are obstacles to ground-up projects. As such, the report suggests that acquiring, repositioning and converting premium assets—whether independent-to-brand or upscale-to-luxury—has become the preferred path to scale.
Luxury development now represents an outsized proportion of construction spend, compared to representing 3.1 percent of the existing room count, a clear overweight bet on premium positioning.
Wellness is also in high demand, and buyers are paying premiums for assets where wellness is “purpose-driven and embedded across the guest journey,” far beyond “a treadmill and a juice bar.”
New partnerships between major hospitality brands and specialist wellness operators point to a broadening base of buyers seeking those integrations. For example, in March, Marriott International announced plans to form a joint venture with the Leali family, founders of Lefay, to incorporate the luxury wellness brand into its global portfolio. The JV was finalized in early June. The Lefay portfolio includes two luxury resorts in Italy, and the brand’s pipeline includes three properties under development in Tuscany, Southern Italy and the Swiss Alps. In a statement released when the deal was first announced, Anthony Capuano, president and CEO, Marriott International, said that “luxury is increasingly defined by wellbeing, purpose and meaningful experiences.”
Sales also indicate a willingness to expand wellness capabilities in established assets. Earlier this month, South Street Partners acquired the Crystal Springs Resort, a destination property in the Appalachian Mountains of Sussex County, N.J. The new owners plan to invest in broadening the asset’s wellness offerings.
AI and Acquisitions
As in nearly all other verticals, artificial intelligence is affecting how hotel deals are done. According to the report, early in the deal process—sometimes even at the letter-of-intent stage—buyers are explicitly modeling AI as a source of upside, asking how much additional value AI tools can unlock from a target’s operations and whether the target’s customer data is clean enough to actually drive personalization and direct bookings.
Operators that cannot answer those questions are seeing bids suppressed or even withdrawn, while those with direct customer relationships and AI-enabled operations are commanding premiums.