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Listen to the short article 17 minutes This audio is auto-generated. Please let us know if you have feedback. Following a year of broad economic uncertainty that suppressed growth for hotels, hospitality industry leaders are looking towards 2026 with mindful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier segments might have a hard time amid a growing wealth bifurcation.

And through everything, hotel business are anticipated to fortify their portfolios with brand-new brand name offerings and collaborations. As the year gets underway, Hotel Dive talked to hospitality leaders from varying corners of the market about their 2026 predictions. Below are the leading patterns anticipated to impact hotel operations, performance, net system development and more this year.

Overall incomes, wages 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 projected to reach $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, increasing labor expenses position a difficulty to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an absolute issue." Rising labor expenses have been a challenge for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in total operating revenue, according to AHLA. In the last few years, countless union hotel employees have gone on strike demanding higher wages in order to stay up to date with the rising expense of living in locations such as California, Hawaii and Las Vegas.

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

In 2015, the union backed New York City's freshly elected Mayor Zorhan Mamdani, who worked on a guarantee to raise New York City's base pay to $30 per hour by 2030. Hotel market associations, including AHLA, have knocked comparable legislation throughout the country, consisting of the just recently passed $30 wage ordinance in Los Angeles. "Need has not kept up with this speed," she said. Incomes, wages and payroll-related expenses paid by hotels now account for more than 32% of total earnings, according to AHLA.

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As more hotel guests turn to expert system to enhance their travel experience, reserving hotels straight through large language designs (LLMs) may be next, hospitality professionals said. Agentic commerce a procedure by which autonomous AI agents act upon behalf of a consumer to find, compare and complete purchases is a trend that has sped up across industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're 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 product marketing at Talkdesk To remain competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand name websites and mobile apps, and alter the method the consumer searches," Kletzel stated.

"If you are not discoverable in an LLM search result which many brands aren't, and this is the big 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 product marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to ensure their home information is being indexed by LLMs to appear in tourist inquiries.