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, hospitality market leaders are looking toward 2026 with cautious optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier segments might struggle amidst a growing wealth bifurcation.

And through it all, hotel business are anticipated to strengthen their portfolios with new brand offerings and partnerships. As the year gets underway, Hotel Dive talked with hospitality leaders from differing corners of the market about their 2026 forecasts. Below are the leading patterns expected to effect hotel operations, efficiency, net system growth and more this year.

Overall salaries, salaries and advantages paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is predicted to climb up to $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, increasing labor expenses pose a difficulty to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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Increasing labor costs have actually been a difficulty for hoteliers for years, Davis said, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in overall operating income, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan through Getty Images In 2026, Davis noted, union negotiations will be "front and center" in New York City, where the New York Hotel and Gaming Trades Council's union agreement with the Hotel Association of New York City City is set to end in July.

In 2015, the union backed New york city City's newly elected Mayor Zorhan Mamdani, who ran on a promise to raise New York City's base pay to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have actually knocked comparable legislation throughout the nation, including the recently passed $30 wage regulation in Los Angeles. "Need has not kept up with this speed," she said. Salaries, incomes and payroll-related costs paid by hotels now account for more than 32% of total revenue, according to AHLA.

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As more hotel guests turn to expert system to enhance their travel experience, reserving hotels straight through big language designs (LLMs) may be next, hospitality specialists said. Agentic commerce a process by which self-governing AI agents act upon behalf of a consumer to find, compare and finish purchases is a pattern that has actually accelerated throughout industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're most likely to utilize AI for travel recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and alter the method the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result which numerous brand names aren't, and this is the big panic that they're all going through right now consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI client experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to guarantee their property information is being indexed by LLMs to appear in traveler inquiries.