Beyond the Ballot Box

What’s at stake for hotel owners in the 2026 midterm elections

By AAHOA Staff

As the 2026 midterm elections approach, hotel owners and operators are watching a policy landscape that reaches far beyond the ballot box.

Access to capital, labor costs, regulations, taxes, joint-employer liability, and tourism promotion all stand to shape the industry’s bottom line depending on how the election cycle unfolds. AAHOA has staked out clear positions on these fronts, from pushing Congress to raise Small Business Administration (SBA) 7(a) and 504 loan limits to $10 million, to advocating for the American Franchise Act’s joint-employer protections, to combating frivolous litigation – alongside state and local fights over taxes, business mandates, and short-term rental rules.

These aren’t abstract debates confined to Washington; they directly affect hotel owners’ everyday realities.

Today’s Hotelier spoke with AAHOA Chairman Rahul Patel and President & CEO Laura Lee Blake to unpack what’s at stake for hoteliers as the midterms draw near.

Which federal policies or regulations could change depending on the outcome of the elections? What would those changes mean for hotel owners?

Blake: The next Congress will make decisions that can land directly on a hotel owner’s bottom line. Three issues stand out for us. The Supporting Trade and Rebuilding Opportunity for National Growth (STRONG) Act in the House and the Loans In Our Neighborhoods (LIONs) Act in the Senate would increase SBA lending limits, giving owners greater access to capital. The American Franchise Act would provide greater certainty around the federal joint-employer standard. And the Lawsuit Abuse Reduction Act of 2025 would address frivolous litigation and the costs that come with it.

Each of these impacts real costs that our AAHOA Members face.

Hotel owners need certainty. They need to know whether financing will be available, who is responsible for employment decisions, and whether they will be forced to spend significant resources defending against meritless litigation.

These are not small issues. They directly affect whether an owner can operate profitably, reinvest in the property, and continue creating jobs in the community. Frankly, we need policies that recognize how difficult and expensive it is to operate a hotel today.

What federal regulatory issues could become priorities after the election?

Patel: Accessing capital, labor regulation, joint-employer liability, and lawsuit abuse will be high on AAHOA’s list.

We advocate for both an increase in capital of SBA loans and to reverse new rules that restrict access to SBA loans. Recent policy changes hinder opportunities for business growth and employment opportunities.

On joint employer, we support the Senate’s American Franchise Act, S.3525, and want a clear and durable federal standard. Hotel owners need to know where responsibility lies for employment decisions rather than having the standard shift from one administration to another.

On lawsuit abuse, AAHOA supports H.R. 5258, the Lawsuit Abuse Reduction Act of 2025. Among other provisions, it would make sanctions for certain Rule 11 violations mandatory and provide for reasonable expenses, including attorneys’ fees and costs.

We will also continue watching overtime, wage requirements, worker classification, and other labor rules, particularly where new requirements could increase costs or limit how hotel owners manage their operations.

What election-related developments should hoteliers be watching around labor?

Blake: Labor is already one of the largest expenses in running a hotel. So even a seemingly small regulatory change can ripple through an entire property.

We are watching all of it: Overtime. Scheduling. Worker classification. Joint employer. Immigration and workforce availability.

Hotels do not close at 5 p.m. They operate 24 hours a day, 365 days a year. Someone has to be at the front desk. Someone has to clean the rooms. Someone has to keep the property safe and operating.

AAHOA’s position is that workforce policies need to recognize the operating realities of the hospitality industry. We need a workforce that is available and a regulatory framework that gives owners enough flexibility to manage it.

What tax policies could be affected by the election?

Patel: Owners should be watching the tax treatment of business income and capital investment, particularly depreciation and deductions that affect the cost of renovating and improving properties.

For example, the One Big Beautiful Bill Act (OBBBA) materially improved depreciation treatment for hotel owners, particularly owners undertaking renovations, PIPs, FF&E replacements, or acquisitions where a cost-segregation study identifies shorter-lived assets.

The biggest change? Permanent 100 percent bonus depreciation. For a qualifying property acquired and placed in service after January 19, 2025, a business generally can deduct the entirety of the cost in the first year, rather than depreciating it over five, seven, or 15 years. Before OBBBA, bonus depreciation was phasing down and would generally have been only 40 percent for 2025. OBBBA reversed that phaseout.

For hotels, this is significant. Renovations, PIPs, FF&E replacements, technology investments, and certain shorter-lived assets identified through cost segregation may qualify for accelerated depreciation, materially affecting the timing and economics of those investments.

AAHOA will continue supporting and advocating for policies that encourage investment rather than make it harder for owners to reinvest in their properties.

How could the election affect issues surrounding hotel development and investment, including construction and renovations?

Blake: For many hotel owners today, the question is not whether they want to invest. It is whether the numbers work.

That is why access to capital matters so much. The STRONG and LIONs Acts would increase SBA 7(a) and 504 loan limits from $5 million to $10 million. In today’s market, acquisitions, construction, and major renovations can quickly blow through existing limits.

Interest rates are different. The Federal Reserve sets monetary policy, not Congress. But elected officials absolutely influence the larger cost environment surrounding development.

Then you layer in property taxes. Insurance. Permitting. Development fees. Labor. Construction costs. Zoning.

A project that worked on paper two years ago may not pencil today. We need to be asking a very basic question of public policy: Are we making it easier for small-business owners to invest, build, and improve properties? Or are we quietly pricing them out?

Patel: The SBA loan limits have not been updated since 2010. For hotel owners facing today’s acquisition, construction, and renovation costs, the current ceiling can leave a significant financing gap.

Raising the limits would give small-business owners more flexibility to finance acquisitions and invest in their properties. We want Congress to get this across the finish line.

What state-level elections or ballot initiatives should hotel owners be paying particular attention to?

Blake: Hotel owners need to watch state and local elections closely because that is where some of the biggest cost pressures are emerging.

In Burlingame, CA, Measure D would increase the hotel tax from 12 percent to 15 percent. We are also watching significant wage mandates across the country. AAHOA supports fair wages. But hotel owners are already facing a cost collision of higher labor, insurance, taxes, utilities, financing, and renovation expenses. At some point, the math breaks.

You cannot protect jobs by making the jobs unaffordable. For hotel owners, dramatic cost increases can mean fewer jobs, less investment, or even closing their doors.

That is why these elections matter. Local policy can hit the P&L fast.

Short-term rentals and platforms such as Airbnb remain a major issue for traditional hotels. What state or local policy changes could emerge from this election cycle?

Patel: We expect continued debate over short-term rental registration, taxation, safety requirements, zoning, and enforcement.

AAHOA’s position is that hotels and short-term rentals competing for the same guests should operate under comparable standards. Hotels invest heavily to comply with requirements for safety, accessibility, taxes, licensing, and zoning.

Those costs should not become a competitive disadvantage simply because another type of accommodation is regulated differently.

The goal isn’t to eliminate short-term rentals. It’s to establish a level playing field.

What should hotel owners be doing now to understand how the election could affect their businesses?

Blake: Start with the candidates who will actually represent your property. Know where they stand on taxes, labor, small-business financing, franchising, and other issues affecting your operation. Do not wait until someone gets elected to introduce yourself. Then tell them your story.

Tell them what another $100,000 in operating costs means. Tell them what happens when insurance doubles. Tell them why you postponed a renovation or could not get financing. Tell them how many people you employ.

That is powerful because it is real.

That’s one reason our September National Leadership & Advocacy Conference was so important. We wanted members to leave with a better understanding of the issues and the relationships they need to advocate effectively.

And yes, vote. Absolutely vote. But advocacy is not a one-day event. The real work begins after Election Day, when campaign promises start becoming public policy.

What are the hottest federal races this election season?

Patel: The Senate races receiving the most attention include contests in Georgia, North Carolina, Ohio, Michigan, Texas, Alaska, and Maine, where relatively few seats could determine control of the chamber.

But AAHOA doesn’t view races solely through the national political lens. We look at candidates, their positions on issues important to hotel owners, their relationships in their communities, and their willingness to work with small businesses.

AAHOA supports candidates who understand the role hotel owners play as employers, investors, taxpayers, and community leaders – and who will listen when policies affecting our industry come before Congress regardless of party affiliation.

The most important race for a hotel owner may not be the one making national headlines.

What is the biggest potential opportunity – and the biggest potential risk – for the hotel industry coming out of this election cycle?

Blake: The opportunity is simple: Turn access into action. Hotel owners have become much more visible and sophisticated advocates. Now we need results. Greater access to capital. A clear joint-employer standard. Less abusive litigation. Fair competition. Policies that actually encourage investment.

The risk? We disappear after Election Day. We cannot do that.

Relationships matter before an election, but they matter even more afterward. When a member of Congress or a state legislator is deciding how to vote, I want them thinking about the hotel owner they know back home. The person employing 30 people, paying property taxes, renovating a building, and sponsoring the Little League team.

That is our advantage. Hotel owners are everywhere.

We are not just an industry. We are part of the economic infrastructure of thousands of American communities. When more policymakers understand that, we will continue to see results for many future generations.

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