Analyzing Fast Casual Sector Growth Trends for 2026

, hospitality industry leaders are looking towards 2026 with cautious optimism. Rising operational expenses are slated to challenge owners this year and lower-tier segments could have a hard time amidst a growing wealth bifurcation.

And through all of it, hotel business are expected to fortify their portfolios with new brand offerings and partnerships. As the year gets underway, Hotel Dive talked with hospitality leaders from differing corners of the market about their 2026 forecasts. Below are the top trends anticipated to effect hotel operations, performance, net unit development and more this year.

Overall salaries, incomes and benefits paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is forecasted to climb to $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, rising labor costs present an obstacle to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an absolute concern." Rising labor expenses have actually been a challenge for hoteliers for several years, Davis said, especially following the COVID-19 pandemic. In general, hotel labor expenses have increased 15.3% from 2019 to 2025, outmatching the 12.8% development in total operating income, according to AHLA. Recently, countless union hotel employees have gone on strike requiring greater earnings in order to keep up with the rising expense of living in places 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 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 City is set to expire in July.

"Demand has not stayed up to date with this speed," she stated. "We're also seeing these challenges intensified by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City Safe Hotels Act. When need is falling and costs are soaring, the mathematics simply does not build up." Salaries, incomes and payroll-related expenses paid by hotels now represent more than 32% of total income, according to AHLA.

Major Regional Shifts in Brand Development

As more hotel visitors turn to expert system to boost their travel experience, booking hotels directly through big language models (LLMs) may be next, hospitality specialists said. Agentic commerce a procedure by which autonomous AI agents act on behalf of a customer to find, compare and complete purchases is a pattern that has actually accelerated throughout markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're likely to utilize AI for travel suggestions. A smaller sized portion (57%) said they 'd be likely to use it for scheduling travel. However that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. "The number of consumers that are searching [by means of LLMs] for product or services in travel has actually ballooned in the last 12 months and is accelerating every day," Kletzel said, adding that inevitably, hotels will "take a hard take a look at how they can allow commerce and transactions through agentic [AI]"" [Brands] can build on the trust they currently have if they do a great job with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand sites and mobile apps, and change the way the customer 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 today 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 require to ensure their home info is being indexed by LLMs to appear in traveler queries.