How to Scale Your Hospitality Brand Efficiently

, hospitality market leaders are looking towards 2026 with cautious optimism. Increasing functional costs are slated to challenge owners this year and lower-tier segments might struggle in the middle of a growing wealth bifurcation.

And through all of it, hotel companies are anticipated to fortify their portfolios with new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from varying corners of the market about their 2026 forecasts. Below are the top patterns expected to impact hotel operations, efficiency, net system development and more this year.

Total incomes, earnings 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 projected to reach $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses pose a difficulty to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright concern." Increasing labor costs have been a challenge for hoteliers for many years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in overall operating income, according to AHLA. In the last few years, countless union hotel workers have actually gone on strike requiring greater incomes in order to keep up with the rising cost of living in locations such as California, Hawaii and Las Vegas.

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 Hotel and Gaming Trades Council's union agreement with the Hotel Association of New York City is set to expire in July.

Last year, the union backed New york city City's newly elected Mayor Zorhan Mamdani, who ran on a promise to raise New york city City's base pay to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have knocked comparable legislation across the country, including the just recently passed $30 wage ordinance in Los Angeles. "Demand has not kept up with this pace," she stated. Salaries, wages and payroll-related costs paid by hotels now account for more than 32% of overall revenue, according to AHLA.

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As more hotel visitors turn to synthetic intelligence to improve their travel experience, scheduling hotels directly through big language designs (LLMs) might be next, hospitality experts said. Agentic commerce a process by which self-governing AI representatives act on behalf of a consumer to find, compare and complete purchases is a pattern that has accelerated across markets like retail.

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

"If you are not visible in an LLM search results page which many brands aren't, and this is the huge panic that they're all going through right now consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, similarly informed Hotel Dive that hospitality players need to guarantee their home info is being indexed by LLMs to appear in traveler queries.