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

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

Overall wages, incomes 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 predicted to climb up to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, rising labor costs posture a challenge to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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Increasing labor expenses have actually been an obstacle for hoteliers for years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor expenses have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% development in overall operating earnings, according to AHLA.

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

In 2015, the union backed New York City's recently elected Mayor Zorhan Mamdani, who worked on a promise to raise New York City's base pay to $30 per hour by 2030. Hotel industry associations, including AHLA, have actually denounced similar legislation throughout the country, consisting of the just recently passed $30 wage ordinance in Los Angeles. "Demand has not kept up with this pace," she stated. Wages, wages and payroll-related costs paid by hotels now account for more than 32% of overall earnings, according to AHLA.

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As more hotel visitors turn to expert system to improve their travel experience, reserving hotels directly through large language designs (LLMs) might be next, hospitality experts stated. Agentic commerce a process by which self-governing AI representatives act on behalf of a consumer to find, compare and complete purchases is a trend that has sped up across markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're likely to use AI for travel suggestions. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct booking, bigger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and change the way the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result which lots of brand names aren't, and this is the huge panic that they're all going through today customers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality product marketing at AI customer experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers require to guarantee their residential or commercial property information is being indexed by LLMs to appear in traveler questions.