Expert Methods to Increase Market Share via Expansion

Listen to the article 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad economic unpredictability that stifled development for hotels, hospitality market leaders are looking toward 2026 with mindful optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier sectors might struggle amid a growing wealth bifurcation.

And through everything, hotel companies are anticipated to strengthen their portfolios with brand-new brand name offerings and partnerships. As the year gets underway, Hotel Dive talked with hospitality leaders from differing corners of the industry about their 2026 predictions. Below are the leading patterns expected to effect hotel operations, performance, net unit growth and more this year.

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

Why Hospitality Brand Share Will Be Rising

Increasing labor costs have actually been an obstacle for hoteliers for years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor expenses have increased 15.3% from 2019 to 2025, exceeding the 12.8% development in overall operating profits, 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, where the New York City Hotel and Gaming Trades Council's union agreement with the Hotel Association of New York City City is set to end in July.

"Demand has actually not stayed up to date with this speed," she stated. "We're also seeing these difficulties compounded by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City City Safe Hotels Act. When demand is falling and costs are soaring, the math simply does not accumulate." Incomes, salaries and payroll-related expenses paid by hotels now represent more than 32% of overall earnings, according to AHLA.

Expert Methods to Boost Brand Share via Expansion

As more hotel visitors turn to synthetic intelligence to boost their travel experience, booking hotels straight through big language designs (LLMs) might be next, hospitality professionals stated. Agentic commerce a procedure by which self-governing AI representatives act on behalf of a consumer to find, compare and finish purchases is a trend that has accelerated throughout markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're likely to use AI for travel suggestions. 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 reservation, bigger multibrand hotel business will "embed LLMs into their own brand name sites and mobile apps, and alter the method the customer searches," Kletzel said.

"If you are not discoverable in an LLM search results page which numerous brand names aren't, and this is the huge 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 client 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 inquiries.