In the hospitality industry, we like to believe that business is fundamentally local. A hotel is a building, a balance sheet, a brand, a management contract, and a stream of room nights. Wars and treaties feel remote and are for diplomats, not developers.
That assumption is no longer safe. That realization was prompted by the Munich Security Report 2026, released ahead of this year’s Munich Security Conference. The report argues that the world is entering an era of what it calls “wrecking-ball politics”, meaning a shift away from gradual reform toward the deliberate dismantling of institutions, alliances, and rules that have governed international relations since World War II.
You do not need to agree with every premise of the report to recognize the core implication for business: we are moving from a rules-based global system to a power-based one. For hotel owners, developers, and operators, that shift has practical consequences, including financial, operational, and reputational.
Hotels are not insulated from geopolitics. They sit at the crossroads of several forces that become unstable when the global order fragments, such as: international capital flows, tourism patterns, supply chains, labor mobility, government regulation, and security concerns.
When those forces become politicized, the hotel business stops being purely commercial and becomes strategic. The Munich report suggests that the erosion of the post-1945 order could produce a world organized around spheres of influence, transactional deal-making, and economic coercion rather than shared rules. Translated into a simple declarative for hotel owners: predictability declines.
Let’s start with financing. For decades, hotel development benefited from a relatively frictionless global capital market. Sovereign wealth funds, private equity, international banks, and cross-border investors could deploy capital where returns were attractive. However, in a fragmented world, capital follows strategy, not just yield.
Lenders and investors will increasingly evaluate geopolitical exposure alongside financial performance. Assets in politically stable jurisdictions may command premiums. Projects dependent on foreign capital may face delays or higher costs.
Next, take a look at supply chains. Hotel construction and renovation depend on global supply networks for furniture, fixtures, equipment, technology systems, and materials. Trade disputes, tariffs, sanctions, and economic coercion can quickly disrupt those flows. The Munich report notes that major powers are increasingly using economic tools as strategic weapons.
Developers who assume procurement will always be about price may discover that it becomes about availability. Supply chain resilience — diversified vendors, regional sourcing, earlier contracting — may matter more than cost optimization.
Increased regulatory risk is also on the table. As nations prioritize sovereignty and domestic interests, regulatory intervention increases. For example — restrictions on foreign ownership, local hiring requirements and labor mandates, more restrictive data rules, and even security obligations.
Hotels, as visible and stationary assets, are easy targets for policy shifts. This is especially true in urban centers where hotels intersect with housing, migration, and public safety debates.
One of the more uncomfortable implications for owners is reputational risk. Hotels are places where government actions are visible. This high profile can arise from using hotels for emergency housing, law enforcement activity, refugee accommodations, and political events. Recent controversies illustrate how quickly operational decisions can become political flashpoints, as evidenced by Hilton’s termination of a franchise because of a hotel owner’s refusal to provide accommodations for ICE agents in the Minneapolis area.
Another trend highlighted by the Munich report was the rise of hybrid warfare and instability across regions. Because hotels have historically served as staging locations, media centers, refuge points, and sometimes targets, physical security, cybersecurity, and crisis planning must move back to the center of operations.
The hotel business model of the past three decades optimized for efficiency. We saw that through lean supply chains, use of maximum leverage in financing, the ability to access cross-border capital, and increasingly standardized brands.
In my view, the emerging environment rewards something different: redundancy, flexibility, and local strength. Hotel owners who survive the next decade will likely be those who maintain diversified financing relationships, build redundant and regional supply networks, understand political risk by jurisdiction, invest in crisis governance, and critically, cultivate trust with local communities.
We’re all familiar with the trope that periods of disruption also create openings. The reality is that companies capable of operating across political divides, that can adapt quickly, and maintain credibility may gain competitive advantage. Stability itself becomes a scarce asset, and therefore a competitive advantage
The Munich report warns that nostalgia for the old order is not a strategy and that new structures must be built for a different world. Hotel owners should take that advice seriously.
Hospitality has always been a business of place. What is changing is that place now sits inside a far more volatile geopolitical landscape. The industry will not stop being local, but it is no longer insulated from global power shifts. Owners who recognize this early can prepare. Those who do not may discover that the operating environment has changed before they realized the rules had.