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, hospitality market leaders are looking toward 2026 with careful optimism. Increasing operational costs are slated to challenge owners this year and lower-tier segments could have a hard time in the middle of a growing wealth bifurcation.

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

Total salaries, earnings and advantages paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is forecasted to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, increasing labor expenses posture a challenge to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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Increasing labor expenses have actually been a challenge for hoteliers for years, Davis said, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in total operating profits, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis kept in mind, union settlements will be "front and center" in New York City, where the New York City Hotel and 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 recently elected 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, including AHLA, have actually denounced comparable legislation throughout the country, including the recently passed $30 wage regulation in Los Angeles. "Need has actually not stayed up to date with this speed," she said. "We're likewise seeing these difficulties intensified by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City City Safe Hotels Act. When need is falling and costs are soaring, the math simply does not accumulate." Wages, earnings and payroll-related costs paid by hotels now represent more than 32% of total revenue, according to AHLA.

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As more hotel guests turn to artificial intelligence to enhance their travel experience, scheduling hotels straight through large language designs (LLMs) might be next, hospitality experts stated. Agentic commerce a process by which autonomous AI representatives act on behalf of a customer to discover, compare and finish purchases is a trend that has 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%) stated they 'd be most likely to use it for scheduling travel. But that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of consumers that are searching [by means of LLMs] for product or services in travel has actually swollen in the last 12 months and is accelerating every day," Kletzel said, adding that inevitably, hotels will "take a difficult look at how they can allow commerce and deals through agentic [AI]"" [Brands] can construct on the trust they currently have if they do a fantastic task with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, bigger 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 lots of brands aren't, and this is the big panic that they're all going through today consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality product marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to guarantee their home information is being indexed by LLMs to appear in traveler inquiries.