Hospitality construction in 2026
Data, diversification and early decision-making.
Ritchie Davidson
Senior Director, Global Hospitality Sector Lead
I expect hospitality construction costs to increase over the course of this year. The main reasons are clear: labour shortages, higher material prices, higher interest rates and borrowing costs. Wider economic and geopolitical disruption, including tariffs and trade tension that can disrupt supply chains will add fuel to the fire.
Construction Certainty Index: what it tells us about hospitality
The Construction Certainty Index scores delivery confidence from 0 to 100 across five areas. A higher score means stronger delivery confidence and lower exposure to risk.
Hospitality scores 54 overall. The strongest pillar is Time & budget (62). The weakest is Technology adoption (42). Risk is 44 and Sustainability is 48. That pattern matters for 2026. It suggests a lack of confidence overall. It suggests hospitality construction leaders feel they can plan but are less prepared when conditions change. Agility will be the competitive differentiator.
Top global risk factors that impacted project delivery in 2025 (% indicating ‘high impact’ on ability to meet project goals) ²⁵
Top global risk factors expected to worsen in 2026-2027 (% expecting situation to deteriorate) ²⁵
25 Findings taken from research undertaken among 1,060 senior decision-makers involved in construction and infrastructure planning. Construction Certainty Index | Currie & Brown.
What will shape hospitality construction in 2026?
1. Labour and finance will be critical
The biggest challenges for hospitality construction in 2026 will be labour shortages (trade workers and professionals), higher borrowing and finance costs, and material price increases. These will significantly impact capital expenditure (capex) costs and investment confidence. It also affects how flexible a project can be when conditions change.
Put simply: labour affects what you can build and how fast. Finance often dictates how much shock a project can absorb when pressure hits and costs rise. The priority is to build in flexibility from the start, so it’s a case of progress not delays.
2. Diversify to deliver
I expect to see more diversification in 2026, as financial constraints bite. We'll see a focus on experiential visitors that can drive greater revenues with higher margins and larger volumes, such as food and beverage or wellness offerings. Organisations must be ready to adapt and evolve as consumer demand shifts.
I’m increasingly seeing diversified portfolios that take advantage of the demand for branded residences, particularly in the Middle East. These are branded, luxury residential properties built within a hospitality resort. They are designed, serviced and operated under a globally recognised brand, offering exclusive amenities and hotel-style living. This provides a real advantage as it reduces the risk in traditional hospitality capex and improves cashflow to support construction across the rest of the programme.
3. Data can be the difference
Increasingly, data-driven decisions will be integral to hospitality development. Data is the key to working smarter and understanding where and how to adapt when challenges hit a project. Not just in terms of the build but in terms of operations too.
Extensive benchmarking, in-depth cost analysis and making the right choices at design stage (including “whole-life” costs and sustainability choices) can build in the agility a project needs to flex when needed. And allows the project team to strategise and safeguard against key risks ahead of time.
But this only works if it happens early and if the data is comprehensive. Once design is fixed and orders are placed, options shrink fast.
Two risks that will derail programmes in 2026
The biggest avoidable risks are the ones that don’t look “construction-led” at first: late operator alignment and late fit-out decisions. Together they drive redesign and late procurement pressure, which is exactly what hospitality schedules struggle to absorb.
Operator requirements agreed too late
Operator engagement and selection is often agreed too late. Hotel management agreements should be agreed up front, not mid-way through design. This can be very costly, leading to redesign, wasted work and time.
FF&E (furniture, fixtures and equipment) and long-lead items
We see FF&E as the biggest cause of opening delays in hospitality. Late design choices, limited local supply and long lead times can all cause significant delays and add cost.
Where is hospitality investment going in 2026?
I expect the hotspots will be:
Asia Pacific and India—including India, Japan, SE Asia and Vietnam, supported by domestic tourism.
Europe—with more focus on refurbishment than new build.
Middle East (KSA, UAE)—supported by sovereign wealth and government strategies, with strong demand for branded residences.
USA—especially sunbelt cities and resorts with strong leisure demand.
We’ll also see more of a push to selective geographies where labour pressure is lower, but demand still exists, such as Southeast Asia and Latin America.
What I’d do now to be ready
1
Bring operators in early and lock requirements before design.
2
Use benchmarking data early to adapt design and drive decisions.
3
Build in agility from the start: through data, and diversification.
In 2026, the hospitality projects that succeed will be the ones that stay calm under pressure. Costs may rise and conditions may shift, but the outcome will be shaped by how well the project is set up to absorb change without losing momentum.
Case study
Certainty delivered for Ras Al Khaimah’s Nobu Hotel
How do you create a five-star experience without overspending? You plan precisely and partner with the right cost consultant from day one. We’re helping bring the iconic Nobu brand to Ras Al Khaimah. The development includes a luxury hotel and branded residences. There’s a beach club and spa. And of course the signature Nobu restaurant. It’s part of a bold vision to make Ras Al Khaimah a global destination for luxury tourism.
Big brands often attract big expectations. Despite the complexity and high-profile setting, we provided clear and transparent cost breakdowns for every option. This has allowed for clarity and control at every stage. We also recommended trusted suppliers that met both quality and budget requirements. This meant the project team had real confidence to make fast, informed decisions. Thanks to early cost certainty, the project is on track and set to deliver something extraordinary in early 2027.