Economists refer to the Matthew Effect when discussing an economy where the “rich get richer and the poor get poorer.” Recent results from the hotel industry show that this concept is deepening in 2026.
America’s hospitality industry is doing fine. But beneath the surface, it’s providing a barometer of several worrying economic trends that business planners should consider when planning for the future
Those trends include…
1 – Luxury hotels are where the money is being made. An industry measure called revenue per available room in that category for daily rates in excess of $500 was up by 9% during a recent week in mid-February versus the same period in 2025, according to data provider STR.
2 – Conversely, that figure gets progressively lower for cheaper types of hotels. RevPAR fell for economy hotels, a category with an average rate around $67.
3 – Foreign visitors, who spend multiples of what domestic travelers do on food and lodging, have been scarce, according to International Trade Administration data. In January, European and Asian visitor numbers were down 3.4% and 11.7%, respectively, compared with a year earlier. Visits by Canadians, for whom only November data is available, were 16.7% lower.
4 – Las Vegas, a mostly middle-class domestic leisure destination also popular with Canadians, is particularly exposed. Visitor numbers fell by 7.5% last year, the biggest drop since records began in 1970, excluding the pandemic.
5 – Pockets of lodging strength also help illustrate what’s driving the U.S. economy. Hotels near major data center AI construction projects, such as those in northern Louisiana, have seen conspicuous demand bumps amid softness elsewhere.
The hospitality business paints a picture of an economy more dependent on wealthy Americans and the AI boom. It also tells us not to focus on International visitors or poorer clientele.
In planning for your business’s needs, what does that indicate about the future?
This Matthew Effect Economy requires us all to cater to the wealthier upper class. That’s where the money is. And if you can do anything related to AI funding, that’s a great idea as well.
Tax planning follows profits. Without them, there isn’t much to do.
Take your business where the money is.
Let me leave you with this…
We’ve passed the second major deadline of tax season being March 16th when S Corp and Partnership Returns were due. The next deadline is April 15th, when Personal, C Corp, Estate, and Trust returns are due.
If you have an S Corp or Partnership Return that has not yet been completed, it must be done before we can complete your personal return.
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To bypass potential Failure To Pay Penalties at the Federal or State Levels, deposits may need to be made with the extensions. Please contact our offices to make arrangements.
As always, if you have problems with your accounting and tax work, I’m waiting for you to contact me.
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Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
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