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, hospitality industry leaders are looking towards 2026 with mindful optimism. Rising functional costs are slated to challenge owners this year and lower-tier sections might have a hard time amidst a growing wealth bifurcation.

And through everything, hotel business are anticipated to strengthen their portfolios with new brand name offerings and partnerships. As the year gets underway, Hotel Dive spoke with hospitality leaders from varying corners of the industry about their 2026 predictions. Below are the leading trends anticipated to effect hotel operations, efficiency, net system development and more this year.

Total wages, earnings and benefits paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is forecasted to reach $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses position an obstacle to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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Increasing labor costs have been a challenge for hoteliers for years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, outpacing the 12.8% development in total operating income, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis noted, union settlements will be "front and center" in New york city City, where the New York City Hotel and Video gaming Trades Council's union contract with the Hotel Association of New York City City is set to expire in July.

Last year, the union backed New york city City's recently chosen Mayor Zorhan Mamdani, who operated on a guarantee to raise New york city City's minimum wage to $30 per hour by 2030. Hotel market associations, including AHLA, have denounced similar legislation throughout the country, including the recently passed $30 wage ordinance in Los Angeles. "Demand has not kept up with this pace," she said. "We're also seeing these difficulties compounded by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City Safe Hotels Act. When demand is falling and expenses are soaring, the mathematics merely does not include up." Incomes, incomes and payroll-related expenditures paid by hotels now account for more than 32% of total earnings, according to AHLA.

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As more hotel guests turn to expert system to boost their travel experience, scheduling hotels straight through big language models (LLMs) may be next, hospitality professionals stated. Agentic commerce a process by which autonomous AI representatives act upon behalf of a customer to find, compare and finish purchases is a trend that has accelerated across markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're likely to use AI for travel suggestions. A smaller sized percentage (57%) said they 'd be most likely to use it for booking travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The number of customers that are browsing [through LLMs] for services and products in travel has ballooned in the last 12 months and is speeding up every day," Kletzel said, adding that undoubtedly, hotels will "take a hard take a look at how they can enable commerce and transactions through agentic [AI]"" [Brands] can develop on the trust they currently have if they do a fantastic job with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct booking, bigger multibrand hotel business will "embed LLMs into their own brand name websites and mobile apps, and change the method the customer searches," Kletzel stated.

"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 today customers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, similarly informed Hotel Dive that hospitality gamers require to ensure their property info is being indexed by LLMs to appear in traveler questions.