Hotel technology spend is the money a hotel puts into the systems, services and people that run its operations and guest experience: property management, distribution, point of sale, networks, software licences and the staff or contractors who support them. That sounds simple. The trouble is that the industry publishes two very different numbers for it, and hotel tech vendors often quote the wrong one in a pitch deck or pricing model.

This explainer sets out what each number measures, what the latest published figures are, where the money goes inside the budget, and what that means if you sell software to hotels.

Two ways to measure hotel IT spend

The first measure is the operating IT department. The 11th edition of the Uniform System of Accounts for the Lodging Industry (USALI) gave technology its own undistributed department, called Information and Telecommunications Systems. As CBRE's Robert Mandelbaum and Adam Barry explained in LODGING in 2022, it has four cost categories:

• Labour costs: salaries, wages and benefits for telephone operators, directors of information systems, analysts and programmers.

• Cost of services: phone, internet, cell and fax for administrative use or when given to guests free of charge.

• System expenses: software licences, maintenance, service, storage and software fees for systems used across the hotel.

• Other expenses: supplies, training, system storage and optimisation, uniforms and travel.

Capital spending on major software and hardware installations is not in this department. That matters, because a PMS replacement or a network upgrade may sit in the capital plan, not the operating line.

The second measure is the IT budget that technology leaders report in surveys. It usually blends operating and project spend, and it is reported by the people who own the budget, often at brand or group level rather than property level. The two numbers are both real. They simply answer different questions.

The published figures

CBRE's 2021 analysis found the IT department was the lowest expense ratio of all undistributed departments. Hospitality Technology's 2024 Lodging Technology Study reports a much higher share because it captures whole IT budgets, and its respondents skew upmarket: 20% luxury and 36% upscale, against 34% midscale and 10% economy. Neither figure is wrong. If you are sizing the wallet of a 120-room select-service hotel, CBRE's property-level number is closer to the truth. If you are selling a platform deal to a brand's technology team, the HT budget view is closer to how they think.

How spend varies by type of hotel

Per-room spend is very uneven. In the same CBRE analysis, IT department expense per available room in 2021 looked like this:

Two other findings matter for anyone selling into these segments. Only 16.4% of the 2,600 properties reported IT labour costs at all, meaning most hotels have no dedicated IT staff. And at limited-service and extended-stay hotels, IT expense was split roughly evenly between phone and internet on one side and system costs on the other. On CBRE's averages, a 100-room limited-service hotel spending around $400 per room would have roughly $40,000 a year in IT department costs, and only about half of that would go to systems. That is the pool every PMS, channel manager, booking engine and guest messaging tool in the building is drawing from.

Where the budget goes

The HT 2024 study split the year's IT budget three ways: 63% to maintaining and optimising existing systems, 30% to new implementations and 7% to internal research and development. Every respondent planned to increase or hold their technology budget in 2024. Planned investments included upgrading the PMS with the current supplier (37% of respondents) or changing to a new supplier (33%), upgrading business intelligence with the current supplier (29%) or a new one (25%), and upgrading revenue management with the current supplier (20%) or a new one (20%).

The same study found 69% of respondents rated integrating new technology with legacy systems as a moderate or major challenge, 54% cited a shortage of skilled technology expertise, and 43% said proving return on investment was difficult. These three challenges explain a lot of stalled deals. If you want the buyer-side view of how those decisions get made, see how hoteliers buy software.

What is pushing costs up

CBRE's 2025 review of 4,834 US hotels found IT department expenses rose 4.6% from 2023 to 2024, against a 4.0% rise in total hotel expenses. The biggest increases came from operated-department systems: reservations, property management, key-coding and point of sale, plus newer guest-facing tools for concierge, in-room entertainment, spa and restaurant reservations, and guest requests. Back-office systems for accounting, payroll, security, sales and maintenance rose by just 1.3%.

Some costs fell. Phone service dropped 1.7% and internet 1.0%. CBRE also expected the price of major hardware and software purchases, which sit in capital spend, to rise by as much as 10% to 20% in 2025, on top of replacing systems left too long after deferred upgrades. And CBRE notes that owners are actively auditing technology bills, consolidating vendors and cutting services that are billed but unused. For one 120-hotel management organisation, consolidating internet providers identified $1 million in annual savings.

Does the spend pay back?

There is evidence that it can. A 2023 Cornell master's thesis by Yiming Dai, Impact of Technology Expenditure on Hotels' Performance, used US property-level data and found a gross marginal product of $3.14 for IT expenditure from 2016 to 2018: on average, each additional dollar spent on IT was associated with $3.14 of extra hotel revenue. Hoteliers themselves are less certain. In the HT study, only 32% said ROI on technology is easy to measure, 61% said traditional ROI metrics can falsely show a zero return, and 78% were willing to consider alternative metrics.

What this means for hotel tech vendors

• Price against a line, not a blank page. With 63% of budget maintaining what is already there, most new software is funded by displacing, upgrading or consolidating an existing system. Name the line you replace in your proposal. Our guide to pricing models for hotel tech software covers per-room, per-property and percentage models.

• Know the per-room ceiling for your segment. A limited-service property's whole systems spend may be a few hundred dollars per room per year. A price that is a large share of that will trigger owner review, whatever the ROI slide says.

• Carry the implementation load. With most hotels lacking IT staff and 54% of technology leaders citing a skills shortage, onboarding is part of the product.

• Speak to the right budget holder. Property operating budgets, group IT budgets and owner capital plans are different pots with different approvers, which we cover in hotel owners versus operators.

• Bring alternative ROI measures. With 61% of respondents wary of traditional ROI, a business case built on labour hours, guest satisfaction and integration savings is easier to approve. See the business case a hotel owner approves.

Spend data is one input to the wider go-to-market system: segment choice, pricing, sales motion and onboarding all depend on knowing how much a hotel can actually absorb. The full model is in our hotel tech GTM strategy guide.

If your pricing or win rate suggests you are selling above what your segment can spend, start with a free revenue leak audit and we will show you where deals are stalling against budget.

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