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Listen to the post 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad economic unpredictability that stifled development for hotels, hospitality market leaders are looking towards 2026 with mindful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier sectors could struggle amid a growing wealth bifurcation.

And through everything, hotel business are anticipated to fortify their portfolios with new brand offerings and partnerships. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying corners of the market about their 2026 predictions. Below are the top trends expected to effect hotel operations, performance, net unit growth and more this year.

Total incomes, salaries and advantages paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, rising labor expenses present a difficulty to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright issue." Rising labor costs have been an obstacle for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in total operating profits, according to AHLA. In the last few years, countless union hotel workers have actually gone on strike demanding greater incomes in order to keep up with the increasing cost 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 noted, union negotiations 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 City is set to expire in July.

In 2015, the union backed New York City's recently chosen Mayor Zorhan Mamdani, who ran on a pledge to raise New york city City's base pay to $30 per hour by 2030. Hotel market associations, consisting of AHLA, have denounced comparable legislation throughout the nation, including the just recently passed $30 wage ordinance in Los Angeles. "Need has actually not kept up with this pace," she stated. Salaries, earnings and payroll-related costs paid by hotels now account for more than 32% of overall revenue, according to AHLA.

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As more hotel visitors turn to expert system to improve their travel experience, reserving hotels straight through big language designs (LLMs) may be next, hospitality professionals said. Agentic commerce a process by which self-governing AI representatives act upon behalf of a consumer to find, compare and complete purchases is a pattern that has actually sped up across 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 suggestions. A smaller portion (57%) said they 'd be most likely to utilize it for scheduling travel. But that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The variety of consumers that are browsing [through LLMs] for services and products in travel has actually ballooned in the last 12 months and is accelerating every day," Kletzel said, adding that undoubtedly, hotels will "take a difficult appearance at how they can enable commerce and transactions through agentic [AI]"" [Brands] can develop on the trust they currently have if they do a fantastic task with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct booking, larger multibrand hotel companies will "embed LLMs into their own brand sites and mobile apps, and alter the method the consumer searches," Kletzel stated.

"If you are not visible in an LLM search result which lots of brand names aren't, and this is the big 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 item marketing at AI client experience platform Talkdesk, similarly told Hotel Dive that hospitality players need to guarantee their property information is being indexed by LLMs to appear in traveler questions.