The Outlook of 2026 Brand Expansion Strategies

, hospitality market leaders are looking towards 2026 with careful optimism. Rising operational expenses are slated to challenge owners this year and lower-tier segments could have a hard time in the middle of a growing wealth bifurcation.

And through all of it, hotel business are expected to fortify their portfolios with 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 forecasts. Below are the leading patterns expected to impact hotel operations, performance, net system growth and more this year.

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

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Rising labor costs have actually been a difficulty for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% development in total operating income, according to AHLA.

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

Last year, the union backed New York City's recently chosen Mayor Zorhan Mamdani, who ran on a pledge to raise New York City's base pay to $30 per hour by 2030. Hotel industry associations, including AHLA, have knocked comparable legislation across the country, consisting of the recently passed $30 wage regulation in Los Angeles. "Need has not kept up with this speed," she said. Wages, salaries and payroll-related costs paid by hotels now account for more than 32% of total income, according to AHLA.

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As more hotel guests turn to expert system to improve their travel experience, booking hotels straight through large language designs (LLMs) may be next, hospitality experts said. Agentic commerce a process by which self-governing AI representatives act upon behalf of a customer to find, compare and finish purchases is a trend that has sped up throughout markets 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 suggestions. A smaller portion (57%) said they 'd be most 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 customers that are browsing [through LLMs] for products and services in travel has ballooned in the last 12 months and is speeding up every day," Kletzel said, adding that inevitably, 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 an excellent job with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct booking, larger multibrand hotel business will "embed LLMs into their own brand name sites and mobile apps, and alter the way the customer searches," Kletzel stated.

"If you are not discoverable in an LLM search engine result 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 said. Michael Klein, head of retail, travel and hospitality product marketing at AI consumer 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 questions.