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Listen to the post 17 min This audio is auto-generated. Please let us know if you have feedback. Following a year of broad financial uncertainty that stifled development for hotels, hospitality industry leaders are looking toward 2026 with cautious optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier sectors could struggle amidst a growing wealth bifurcation.

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

Overall wages, salaries and benefits paid by U.S. hotels increased 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 a roughly 3% year-over-year boost, per AHLA. For hotel owners, rising labor costs pose a challenge to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute concern." Rising labor costs have been a challenge for hoteliers for many years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, surpassing the 12.8% development in overall operating income, according to AHLA. In current years, thousands of union hotel employees have actually gone on strike demanding greater incomes in order to stay up to date with the rising cost of living in locations such as California, Hawaii and Las Vegas.

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

In 2015, the union backed New york city City's freshly elected Mayor Zorhan Mamdani, who ran on a promise to raise New York City's base pay to $30 per hour by 2030. Hotel market associations, consisting of AHLA, have denounced similar legislation throughout the nation, including the just recently passed $30 wage regulation in Los Angeles. "Demand has actually not kept up with this pace," she stated. Salaries, incomes and payroll-related expenses paid by hotels now account for more than 32% of total profits, according to AHLA.

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As more hotel visitors turn to artificial intelligence to boost their travel experience, scheduling hotels straight through big language models (LLMs) might be next, hospitality professionals stated. Agentic commerce a procedure by which self-governing AI agents act on behalf of a customer to find, compare and complete purchases is a pattern that has sped up 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 sized portion (57%) said they 'd be most likely to utilize it for scheduling travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of customers that are searching [by means of LLMs] for services and products in travel has actually ballooned in the last 12 months and is accelerating every day," Kletzel said, adding that undoubtedly, hotels will "take a difficult take a look at how they can enable commerce and transactions through agentic [AI]"" [Brands] can develop on the trust they currently have if they do a fantastic task with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, larger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and change the way the customer searches," Kletzel said.

"If you are not visible 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 product marketing at AI customer experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to ensure their home details is being indexed by LLMs to appear in traveler questions.