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Listen to the article 17 min This audio is auto-generated. Please let us know if you have feedback. Following a year of broad economic unpredictability that stifled development for hotels, hospitality market leaders are looking toward 2026 with careful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier segments might have a hard time amid a growing wealth bifurcation.

And through it all, hotel business are expected to strengthen their portfolios with brand-new brand offerings and collaborations. As the year gets underway, Hotel Dive talked to hospitality leaders from differing corners of the market about their 2026 forecasts. Below are the leading patterns anticipated to effect hotel operations, efficiency, net system development and more this year.

Total salaries, 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 predicted to climb to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, rising labor costs pose an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright concern." Rising labor costs have been an obstacle for hoteliers for many years, Davis said, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, surpassing the 12.8% growth in total operating income, according to AHLA. In current years, countless union hotel workers have actually gone on strike demanding greater earnings in order to keep up with the increasing expense of living in locations 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 City, where the New York City Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City is set to expire in July.

"Demand has not kept up with this rate," she said. Wages, earnings and payroll-related expenses paid by hotels now account for more than 32% of overall earnings, according to AHLA.

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As more hotel guests turn to synthetic intelligence to enhance their travel experience, booking hotels straight through large language models (LLMs) might be next, hospitality experts stated. Agentic commerce a procedure by which autonomous AI agents act on behalf of a consumer to discover, compare and finish purchases is a pattern that has actually accelerated across industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're likely to utilize AI for travel recommendations. A smaller portion (57%) said they 'd be likely to use it for scheduling travel. That number is growing, Jonathan Kletzel, PwC's travel, transportation 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 swollen in the last 12 months and is accelerating every day," Kletzel stated, adding that inevitably, hotels will "take a tough take a look at how they can make it possible for commerce and deals through agentic [AI]"" [Brands] can construct on the trust they currently have if they do an excellent 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 booking, bigger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and change the method the consumer searches," Kletzel said.

"If you are not visible in an LLM search results page which numerous brands aren't, and this is the huge panic that they're all going through right now consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality product marketing at AI client experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers need to ensure their property info is being indexed by LLMs to appear in traveler queries.