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Listen to the article 17 minutes This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad economic unpredictability that suppressed development for hotels, hospitality industry leaders are looking towards 2026 with cautious optimism. Rising operational costs are slated to challenge owners this year and lower-tier segments could struggle in the middle of a growing wealth bifurcation.

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

Overall wages, wages and advantages paid by U.S. hotels rose 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, rising labor expenses position a challenge to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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Increasing labor expenses have been a difficulty for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. In general, hotel labor expenses have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in total operating revenue, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan by means of Getty Images In 2026, Davis noted, union settlements will be "front and center" in New York 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 not kept up with this rate," she said. Incomes, incomes and payroll-related expenses 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 artificial intelligence to enhance their travel experience, reserving hotels straight through large language designs (LLMs) might be next, hospitality experts stated. Agentic commerce a procedure by which self-governing AI representatives act on behalf of a consumer to find, compare and complete purchases is a trend that has accelerated throughout industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're likely to utilize AI for travel recommendations. A smaller percentage (57%) stated they 'd be likely to utilize it for reserving travel. However that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The number of customers that are searching [via LLMs] for products and services in travel has actually ballooned in the last 12 months and is accelerating every day," Kletzel stated, including that undoubtedly, hotels will "take a tough appearance at how they can enable commerce and deals through agentic [AI]"" [Brands] can construct on the trust they currently have if they do a terrific job with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct reservation, larger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and alter the method the customer searches," Kletzel said.

"If you are not discoverable in an LLM search 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 customer experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers require to ensure their property info is being indexed by LLMs to appear in traveler questions.