How to Scale Your Hospitality Group Efficiently

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

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

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

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Increasing labor expenses have been a difficulty for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, exceeding the 12.8% development in overall operating income, according to AHLA.

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 Hotel and Video gaming Trades Council's union contract with the Hotel Association of New York City City is set to expire in July.

"Need has actually not kept up with this pace," she stated. Incomes, 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 guests turn to expert system to improve their travel experience, booking hotels directly through large language models (LLMs) might be next, hospitality professionals said. Agentic commerce a process by which self-governing AI agents act on behalf of a consumer to discover, compare and complete purchases is a trend that has actually sped up throughout markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're most likely to utilize 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 item marketing at Talkdesk To stay competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand name websites and mobile apps, and change the way the customer searches," Kletzel stated.

"If you are not discoverable in an LLM search engine result which many brands aren't, and this is the big 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 product marketing at AI consumer experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers require to guarantee their residential or commercial property info is being indexed by LLMs to appear in traveler inquiries.