Large-scale sporting events, concerts and conventions are playing an increasingly important role in shaping where hospitality investment flows. Travelers are more likely than ever to plan trips around special events, creating concentrated periods of demand that can influence everything from hotel occupancy to long-term regional development strategies.

The FIFA World Cup was projected to generate a $9.6 billion surge in spending across the United States, while the National Travel and Tourism Office forecasts annual international visitation will grow to 85.2 million visitors by 2030 as the country prepares to host the 2028 Summer Olympics and the 2034 Winter Olympics.

Before cities can capitalize on this demand, they must have the hospitality infrastructure to support it. Hotel capacity, restaurants, entertainment venues and meeting spaces all play a role in attracting major events and the tourism dollars that follow.

Phoenix, Arizona, provides a strong example of how event-driven demand can support long-term hospitality growth, with a steady stream of major sporting and entertainment events throughout the year.

“Phoenix's calendar of high-profile conferences, sporting events and entertainment creates sustained demand for hotels and resorts, making it one of the country's most compelling hospitality markets,” says David Campbell, who oversees PCL’s Phoenix Buildings operations.

The demand extends beyond leisure travel. Corporate investment and convention activity are also generating significant demand for accommodations. IBISWorld reports that while business travelers account for only about 20% of total trips, they generate 40% to 60% of lodging and air revenue.

In Arizona, strong tourism and business growth are driving continued expansion. According to a May 2026 report from IBISWorld, the state is expected to add approximately 4,900 hotel rooms over the next five to seven years as developers respond to increasing visitor demand, corporate travelers and major investments moving into the region.

Campbell notes that large-scale corporate investments are creating a secondary source of hospitality demand as companies bring employees, executives, partners and customers into growing markets. These travelers require accommodations, meeting spaces, plus venues for conferences and corporate events.

Together, these factors are creating stronger demand in specific markets, particularly those benefiting from tourism growth, major events and new business investment.

The nearly $8 trillion wellness industry is having a growing influence on travel decisions, according to the Global Wellness Institute. A March 2026 IBISWorld report reveals that 94% of travelers said they incorporate self-care into their trips, while 59% reported taking solo wellness getaways. That demand is driving investment in hotels and resorts that offer wellness-focused amenities and experiences. Hotels and resorts are investing in spas, personalized fitness programs, wellness centers and immersive experiences.

In markets such as California and Arizona, a sunny climate, outdoor recreation opportunities and established wellness cultures make these offerings particularly appealing.

“Travelers are prioritizing experience over a standard hotel through wellness-driven amenities, outdoor-focused properties and destinations that feel immersive,” says Jeyre Lewis, area manager for PCL’s Orange County office.

The trend extends beyond just wellness, too — concept-driven hotels are gaining popularity.

Hotels are finding new ways to stand out, from themed and luxury properties to resorts focused on wellness, local culture and unique guest experiences, including specialty food and beverage offerings.

In Colorado, that demand is especially evident in mountain resort communities. Strong tourism appeal and luxury guest expectations are driving both new development and renovation activity. Ski resort markets such as Aspen, Winter Park, Vail and Frisco continue to attract investment in luxury hospitality, mixed-use developments and destination-oriented amenities. According to a March 2026 IBISWorld report, hotels in these four counties are expected to generate about $1.2 billion in revenue in 2026, reflecting strong demand in the region.

“There's always been a push to create a better guest experience, but we're seeing a stronger focus on amenities that generate experiences and revenue beyond the room itself,” says Ankit Sanghvi, director of preconstruction for PCL’s Denver Buildings operations. “Whether that's spas, wellness facilities, food and beverage offerings or event spaces, owners are always looking for ways to differentiate themselves.”

Technology is becoming another critical differentiator. Sanghvi notes that upper-tier hotels are investing in enhanced digital infrastructure, smart building systems and personalized guest experiences powered by connected technologies. Mobile check-in, smart room controls, enhanced Wi-Fi networks and AI-driven guest services are reshaping how hotels are designed and operated.

As demand for travel experiences grows, hotel owners are investing in amenities and technologies that distinguish their properties.

According to a March 2026 IBISWorld report, new hotel construction generated approximately $16.4 billion in industry revenue in 2025, representing 69% of hospitality construction revenue. Renovations and additions generated another $6.4 billion, accounting for nearly 27% of industry revenue, with continued growth expected as owners invest in existing assets.

High financing costs, economic uncertainty and rapidly evolving guest expectations are all contributing to this shift. Rather than pursuing ground-up development, many owners are finding opportunities to improve returns through strategic renovations that modernize properties, add amenities and reposition assets within competitive markets.

In many cases, these investments are not optional. As guest expectations evolve, hospitality owners are refreshing properties more frequently to remain competitive. Campbell notes that higher-end resorts often update key spaces every three to five years, while Sanghvi points to growing pressure for shorter renovation cycles as amenities, technology and guest preferences continue to evolve.

In California, where tourism remains a major economic driver, renovation activity is particularly important. According to IBISWorld, the state generates $43.7 billion in annual hotel revenue and welcomes roughly 270 million visitors each year. With demand driven by tourism, business travel, entertainment and major events, owners are continually reinvesting in renovations and amenity upgrades to keep properties competitive.

Florida’s hospitality market faces similar pressures. According to IBISWorld, the state ranks second in the nation for hotel industry revenue, generating $35.3 billion annually, and welcomes more than 140 million visitors each year drawn by its beaches, theme parks, convention destinations and professional sports franchises. In a market with such intense competition for travelers, owners are continually investing in updates and amenity improvements to maintain their properties' appeal.

“Every few years, properties need to be refreshed to stay competitive. That cycle never really stops,” says Charlie Dorr, director of business development for PCL’s Florida Buildings operations.

From both a financial and operational perspective, renovations offer several advantages:

• Lower upfront capital requirements
• Faster time to market
• Fewer regulatory and entitlement hurdles
• Ability to reposition existing assets in prime locations

“Renovations are often less expensive per key, faster to deliver, and easier to bring to market than ground-up projects,” says Lewis. “They help to ensure that properties remain relevant while maintaining a more controlled level of investment.”

Location also plays a significant role in determining whether projects move forward as renovations or new builds. In land-constrained environments — such as dense urban markets in Southern California or Colorado's mountain resort communities — renovation is often less about refreshing finishes and more about protecting a property's competitive position in a location that cannot easily be replicated.

“In the Colorado mountains, location is everything,” says Sanghvi. “When properties are already near the ski hill or base village, renovation often makes more sense than building farther away, especially with limited buildable land in these markets.”

The projects moving forward today tend to share a few common characteristics:

• Strong market demand
• Clear brand positioning
• Financial structures that can absorb higher construction costs

For example, luxury hotels continue to attract investment because guest demands, premium room rates and destination-oriented experiences provide more room to absorb elevated construction costs.

“New builds are still great endeavors when market and financing align, but it takes the right conditions and the right team to bring those deals together today,” says Dorr.

New projects in the luxury segment are more likely to move forward, as they can absorb elevated construction costs with more financial backing.

In 2026, project feasibility is influenced by much more than construction cost alone. Developers must weigh financing conditions, labor availability, material pricing, supply chain variability and operational impacts, all while responding to shifting traveler expectations. These factors can affect both project viability and long-term returns.

Regulatory requirements also vary significantly by market. In Southern California, for example, entitlement processes, environmental reviews, prevailing wage requirements, and sustainability regulations can add time and complexity to project delivery.

“Not all regulatory requirements are visible early on, which is why having a team with regional construction experience can make a significant difference,” says Lewis.

As a result, owners are placing greater emphasis on planning earlier in the development process. Evaluating renovation versus new-build scenarios, developing phasing strategies, identifying procurement risks and aligning construction schedules with operational demands are becoming increasingly important parts of project planning, particularly for active hotels and resorts where construction activity can directly affect revenue generation.

“Preconstruction is where you understand the owner’s non-negotiables, solve for constraints and build a plan around what matters most,” says Sanghvi. “That front-end planning is what creates schedule certainty and helps clients secure the right partners.”

The outlook for hospitality construction is steady, but increasingly selective.

Demand remains strong, but the factors shaping development decisions have become more complex. From event-driven travel and experience-based spending to financing pressures and evolving guest expectations, owners and developers must balance opportunity with a growing number of variables.

Despite those challenges, several areas of the market continue to attract investment. Renovation activity is accelerating, luxury and destination-driven properties are attracting investment, and growing markets are creating demand for new accommodations and experiences.

Success will depend on understanding not only where demand exists today, but how traveler preferences, market conditions and project economics are evolving over time. Data is becoming a bigger factor in determining which hospitality projects move forward and where they get built.

Methodology: For this report, PCL Construction analyzed reports from IBISWorld, a leading provider of analyst-verified industry research and market intelligence, and combined those insights with expertise from PCL subject matter experts and the company's extensive hospitality construction expertise.

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