Commercial Loans for Hotels: Financing Trends Today

The hotel industry is experiencing a major transformation. Whether you are looking to purchase a hotel, fund required renovations, or expand your property, understanding the current lending trends can help you make the smartest investment decisions.

Hotel financing in 2026 looks different than just a few years ago. Technology is no longer optional—it’s essential. Plus, brand standards are more demanding, and labor challenges are pushing owners to invest in efficiency. And with interest rates stabilizing, hotel owners have an opportunity to secure better loan terms.

Let’s take a closer look at today’s top financing trends for hotel owners and operators across the hospitality industry.

2026 Hotel Industry Performance

The hotel industry has bounced back from disruptions during the pandemic-era. Occupancy rates are now steady, and Revenue Per Available Room (RevPAR) has returned to—or even exceeded—pre-2020 levels in most markets. Leisure travel has fully recovered, while business travel continues to evolve as companies adopt—or possibly roll back—hybrid work policies.

In addition, different hotel types are performing in varying ways. Not all hotels see the same results, which affects lending options. This is where each hotel category stands right now:

• Select-service and limited-service hotels (like Holiday Inn Express or Hampton Inn) are doing very well. Their strong occupancy and lean operations appeal to lenders because they have predictable income and lower overhead.
• Extended-stay properties continue to see high demand from remote workers, construction crews, and people relocating for work.
• Full-service and luxury hotels are recovering more gradually as group bookings and business travel return to previous levels.
• Boutique and lifestyle properties are gaining momentum as travelers look for unique experiences instead of cookie-cutter stays.

Knowing where your property fits in the market will help you find the best hotel loan for your specific situation.

Key Trends in the Hotel Industry

Five major shifts are reshaping hotel financing in 2026. These changes are creating both new demands and new opportunities for hotel owners and operators.

1. Investing in Technology is Essential

What Has Changed?

A few years ago, technology simply gave hotels a competitive edge. Today, guests EXPECT IT. Mobile check-in, digital room keys, modern booking systems, and fast Wi-Fi across the property are all standard. Therefore, hotels without these features are losing bookings to their competitors with better technology.

What This Means for Hotel Loans?

Modern technology impacts the numbers lenders care about. Properties with outdated systems have lower RevPAR, meaning they earn less per hotel room. They also create higher operating costs and receive lower guest satisfaction scores. Combined, these issues hurt your bottom line—and lenders pay close attention to your profit numbers when reviewing your loan application.

Key Hotel Technology Investments Include -

• Modern property management systems (the software that runs your hotel)
• Pricing tools that adjust room rates automatically based on demand
• Apps for guest check-in, room service, and housekeeping requests
• Smart thermostats, lights, and door locks
• Strong Wi-Fi throughout the building

How to Finance Hotel Technology Upgrades?

Most hotel owners use commercial and industrial loans (“C&I loans”) or business term loans for technology projects. Some may also bundle tech upgrades into larger projects financed with commercial real estate loans (“CRE loans”).

2. Brand Requirements are Getting Bigger and More Expensive

What are PIPs?

If your hotel is part of a franchise (ex: Marriott, Hilton, IHG, etc.), you know about Property Improvement Plans, or “PIPs.” These are the renovations required by your brand to uphold your franchise agreement. In recent years, PIPs have gotten bigger and are happening more often. Specifically, brands require everything from new lobbies to property-wide renovations, creating major financial pressure for hotel owners.

What PIPs Cost?

Typically, PIP renovations cost between $8,000 and $25,000 per room, depending on the scope of the project and brand requirements. For a 100-room hotel, that translates to $800,000–$2.5 million.

You can’t skip these upgrades. If you don’t complete your required PIPs, you could lose your franchise, which hurts your property value and overall market appeal.

What This Means for Hotel Loans?

Lenders understand that PIPs are not optional for franchise hotels. They usually view these investments positively because maintaining brand standards protects your property’s value. The smartest hotel owners plan ahead and get financing before PIP deadlines, so they aren’t rushed.

How to Finance PIPs?

• Commercial real estate loans to refinance your existing mortgage and take cash out for PIPs.
• C&I loans for equipment, FF&E, and construction-related needs.
• Business term loans specifically for renovation projects.
• Business line of credit if you are doing the work in phases.
• SBA 504 loans for smaller owner-occupied hotels with major improvements (must meet SBA size standards).

3. Labor Shortages are Driving Efficiency Investments

The Staffing Challenge -

Hotels across the country are struggling to find and keep good employees. Front desk staff, housekeepers, and maintenance workers are difficult to hire in most markets. And when you finally fill those roles, you are still competing with other businesses to keep your workforce, which means higher wages.

Automation and Efficiency Take Priority -

Rather than fighting an uphill battle for quality staff, smart hotel owners are investing in solutions that reduce labor dependency:

• Self-service check-in kiosks to reduce front desk staffing needs
• Maintenance systems that predict problems before equipment breaks down
• Software that manages housekeeping schedules more efficiently
• Apps that work as a digital concierge
• Automated systems that adjust room prices based on demand

What This Means for Hotel Loans?

Lenders like seeing hotels invest in efficiency because there is a strong ROI for labor-saving investments, meaning better profits. As a result, hotels can consistently make their loan payments, and owners with a clear plan to reduce labor costs usually receive better loan terms.

How to Finance Labor-Saving Upgrades -

• C&I loans for equipment and technology financing.
• Business term loans for smaller efficiency projects.
• Business credit lines for ongoing upgrades.

4. Green Improvements Save Money and Attract Guests

Why Sustainability Matters for Hotels?

“Going green” isn’t just about marketing anymore—it’s about your bottom line. Guests increasingly prefer hotels that care about the environment. Plus, rising utility costs drive monthly bills higher. Many hotel owners are finding that eco-friendly upgrades pay for themselves through their reduced operating expenses.

Sustainable Improvements with the Highest Impact -

• Energy-efficient HVAC systems (often reducing energy costs 20-30%)
• LED lighting throughout your property
• Solar panels installations
• Electric vehicle charging stations for guests
• Low-flow toilets and showerheads that lower water bills

The Financial Upside of Green Improvements -

Many sustainable improvements qualify for rebates from utility companies, tax credits, and incentive programs that offset the upfront costs. They also reduce ongoing operating expenses like utility bills—sometimes dramatically.

What This Means for Hotel Loans?

Some commercial lenders offer better rates or loan terms for green improvements. Even better, the strong ROI on many sustainability projects makes them attractive to underwriters since they improve property cash flow.

How to Finance Sustainable Upgrades for Hotels -

• C&I loans for equipment like HVAC systems, solar panels, and EV chargers.
• Commercial real estate loans to bundle green improvements into a refinance.
• Business lines of credit for phased upgrades over time.

5. Interest Rate Trends Favor Hotel Acquisitions and Refinancing

Current Interest Rate Environment -

After a few years of fluctuating rates, things are finally stabilizing. This creates opportunities for hotel owners in two primary areas: funding new hotel acquisitions and refinancing existing loans.

Funding Hotel Acquisitions -

If you are looking to buy a hotel, the current environment is creating interesting dynamics. While rates are higher compared to the record lows of a few years ago, property values have adjusted in many markets, which can offset higher interest costs. Therefore, buyers with strong balance sheets and clear operational plans are finding opportunities in hotel acquisition.

Hotel Loan Refinance Opportunities -

You should consider refinancing if: 1) your current rate is significantly higher than today’s interest rates, 2) your loan is about to mature, or 3) you want cash for upgrades. Remember, even a small rate reduction through refinancing can save tens of thousands every year on a large commercial loan.

 How to Finance Hotel Acquisitions and Refinancing - 

• Corporate lending solutions for buying larger hotels or multiple properties ($5–$25 million+) with customized financing structures.
• Commercial real estate loans for purchasing hotels of any size OR refinancing existing loan solutions.
• SBA 7(a) loans for hotel acquisitions up to $5 million with lower down payments OR refinancing a SBA loan.

Finding the Best Loan for Hotel Financing

Are you planning to finance growth, renovations, or the day-to-day operating needs for your hotel? Academy Bank offers a full range of commercial lending solutions for the hospitality industry:

• Commercial Real Estate Loans: CRE loans are best for buying hotels, building new properties, and making major investments. These loans offer long-term financing with competitive rates.
• Commercial and Industrial Loans: C&I loans are designed to purchase equipment, furniture and fixtures, and construction phase needs.
• Corporate Lending: For larger hotel acquisitions and portfolio purchases, we offer specialized loan solutions with flexible structures. Corporate banking is ideal for recapitalizations, private equity-backed transactions, and expansion financing.
• SBA Loans: Government-backed small business loans with affordable rates and lower down payments. They are excellent for buying hotels, expanding properties, and funding major improvements.
• Business Lines of Credit: Flexible access to working capital for seasonal cash flow needs and ongoing expenses. Borrow what you need and pay interest only on the amount you use.
• Business Term Loans: Great option for hotel renovations, brand-required PIPs, technology upgrades, and equipment purchases. Plus, their fixed monthly payments make budgeting easy.

Ready to discuss your hotel’s capital needs? Our experienced commercial lending team understands the challenges and opportunities in your industry! Contact a commercial banker today and browse our loan options.

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