Will Fast Casual Investments Be Profitable in 2026?

, 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 all of it, hotel companies are anticipated to fortify their portfolios with brand-new brand offerings and partnerships. As the year gets underway, Hotel Dive spoke with hospitality leaders from varying corners of the industry about their 2026 forecasts. Below are the top trends anticipated to impact hotel operations, efficiency, net system development and more this year.

Total incomes, earnings and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is projected to climb up to $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, rising labor expenses position 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 expenses have actually been a difficulty for hoteliers for many years, Davis said, especially following the COVID-19 pandemic. In general, hotel labor costs have actually increased 15.3% from 2019 to 2025, surpassing the 12.8% growth in total operating income, according to AHLA. In the last few years, countless union hotel employees have gone on strike demanding higher incomes in order to stay up to date with the rising cost of living in places such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis noted, 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 agreement with the Hotel Association of New York City City is set to expire in July.

In 2015, the union backed New york city City's newly chosen Mayor Zorhan Mamdani, who worked on a guarantee to raise New York City's minimum wage to $30 per hour by 2030. Hotel market associations, including AHLA, have actually denounced comparable legislation throughout the country, consisting of the just recently passed $30 wage regulation in Los Angeles. "Demand has not kept up with this rate," she said. Salaries, wages and payroll-related expenses paid by hotels now account for more than 32% of total revenue, according to AHLA.

Can Hospitality Investments Remain Profitable in 2026?

As more hotel guests turn to expert system to enhance their travel experience, scheduling hotels straight through big language designs (LLMs) may be next, hospitality specialists said. Agentic commerce a procedure 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 throughout industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're likely to use 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 sites and mobile apps, and change the method the consumer searches," Kletzel stated.

"If you are not visible in an LLM search engine result which many brand names aren't, and this is the huge panic that they're all going through right now consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality product marketing at AI client experience platform Talkdesk, likewise informed Hotel Dive that hospitality players need to ensure their home info is being indexed by LLMs to appear in tourist queries.