Evaluating Top Franchise Models for 2026

, hospitality industry leaders are looking toward 2026 with mindful optimism. Rising functional costs are slated to challenge owners this year and lower-tier segments could struggle amid a growing wealth bifurcation.

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

Total wages, incomes and advantages paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, rising labor costs pose an obstacle to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

Comparing Leading Franchise Models for 2026

Increasing labor costs have actually been a challenge for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor expenses have increased 15.3% from 2019 to 2025, surpassing the 12.8% development in overall operating profits, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan through Getty Images In 2026, Davis kept in mind, 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 agreement with the Hotel Association of New York City is set to expire in July.

"Demand has not kept up with this pace," she said. Wages, wages and payroll-related costs paid by hotels now account for more than 32% of total profits, according to AHLA.

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As more hotel visitors turn to expert system to boost their travel experience, scheduling hotels straight through large language models (LLMs) might be next, hospitality experts stated. Agentic commerce a procedure by which autonomous AI agents act on behalf of a consumer to discover, compare and finish purchases is a trend that has actually accelerated across markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're most likely to use AI for travel recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct booking, bigger multibrand hotel companies 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 many brand names aren't, and this is the big panic that they're all going through today consumers 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 told Hotel Dive that hospitality gamers need to ensure their property details is being indexed by LLMs to appear in tourist queries.