Identifying Profitable Hospitality Ventures in 2026

, hospitality industry leaders are looking toward 2026 with mindful optimism. Rising operational expenses are slated to challenge owners this year and lower-tier sections might struggle in the middle of a growing wealth bifurcation.

And through everything, hotel business are expected to fortify their portfolios with brand-new brand offerings and partnerships. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying corners of the industry about their 2026 forecasts. Below are the leading patterns expected to impact hotel operations, performance, net system growth and more this year.

Total wages, incomes and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is forecasted to reach $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, rising labor expenses position a difficulty to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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Rising labor costs have been an obstacle for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in overall operating income, according to AHLA.

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

"Demand has actually not kept up with this rate," she stated. Incomes, salaries and payroll-related expenditures paid by hotels now account for more than 32% of total earnings, according to AHLA.

Targeting Profitable Hospitality Ventures in 2026

As more hotel visitors turn to expert system to enhance their travel experience, reserving hotels straight through big language designs (LLMs) might be next, hospitality specialists said. Agentic commerce a process by which autonomous AI agents act upon behalf of a consumer to find, compare and complete purchases is a pattern that has 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 use AI for travel recommendations. A smaller portion (57%) stated they 'd be likely to utilize it for reserving travel. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. "The number of consumers that are searching [via LLMs] for product or services in travel has actually swollen in the last 12 months and is accelerating every day," Kletzel said, including that undoubtedly, hotels will "take a tough take a look at how they can enable commerce and transactions through agentic [AI]"" [Brands] can build on the trust they already have if they do a great task with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct reservation, bigger multibrand hotel companies will "embed LLMs into their own brand name sites and mobile apps, and change the method the consumer searches," Kletzel stated.

"If you are not discoverable in an LLM search results page which many 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 players require to guarantee their home information is being indexed by LLMs to appear in tourist queries.