Targeting Profitable Business Ventures in 2026

Listen to the short article 17 minutes 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. Rising functional expenses are slated to challenge owners this year and lower-tier sections might struggle amid a growing wealth bifurcation.

And through all of it, hotel companies 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 top patterns anticipated to impact hotel operations, efficiency, net system development and more this year.

Total wages, incomes and benefits paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, increasing labor expenses pose a difficulty to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an absolute concern." Rising labor expenses have been a challenge for hoteliers for many years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, surpassing the 12.8% development in overall operating earnings, according to AHLA. In the last few years, countless union hotel employees have gone on strike requiring greater incomes in order to keep up with the rising expense 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 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 expire in July.

"Need has actually not kept up with this rate," she said. Salaries, salaries 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 enhance their travel experience, booking hotels directly through big language models (LLMs) might be next, hospitality specialists stated. Agentic commerce a procedure by which self-governing AI representatives act upon behalf of a consumer to find, compare and complete purchases is a trend that has accelerated throughout markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're most likely to utilize 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 product marketing at Talkdesk To remain competitive with direct booking, bigger multibrand hotel companies will "embed LLMs into their own brand name sites and mobile apps, and alter the method the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search results page which lots of brands aren't, and this is the huge panic that they're all going through right now customers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, similarly informed Hotel Dive that hospitality players need to guarantee their property information is being indexed by LLMs to appear in traveler questions.