Targeting Profitable Hospitality Ventures in 2026

, hospitality industry leaders are looking towards 2026 with careful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier sectors could have a hard time amid a growing wealth bifurcation.

And through all of it, hotel companies are anticipated to strengthen their portfolios with brand-new brand name offerings and partnerships. As the year gets underway, Hotel Dive talked to hospitality leaders from differing corners of the industry about their 2026 forecasts. Below are the top patterns expected to effect hotel operations, performance, net system growth and more this year.

Total salaries, earnings 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 an approximately 3% year-over-year increase, per AHLA. For hotel owners, increasing labor expenses pose an obstacle to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told 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. In general, hotel labor expenses have increased 15.3% from 2019 to 2025, surpassing the 12.8% development in overall operating income, 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 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 end in July.

In 2015, the union backed New York City's recently chosen Mayor Zorhan Mamdani, who worked on a promise to raise New york city City's minimum wage to $30 per hour by 2030. Hotel industry associations, including AHLA, have denounced similar legislation throughout the country, including the recently passed $30 wage ordinance in Los Angeles. "Demand has not stayed up to date with this speed," she stated. "We're likewise seeing these challenges compounded by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City City Safe Hotels Act. When demand is falling and expenses are skyrocketing, the math merely does not accumulate." Incomes, salaries 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 synthetic intelligence to enhance their travel experience, reserving hotels directly through big language designs (LLMs) might be next, hospitality specialists stated. Agentic commerce a procedure by which self-governing AI representatives act on behalf of a consumer to find, 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 stated they're most likely to utilize AI for travel suggestions. A smaller sized percentage (57%) stated they 'd be most likely to utilize it for reserving travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The number of consumers that are browsing [by means of LLMs] for services and products in travel has ballooned in the last 12 months and is accelerating every day," Kletzel said, adding that inevitably, hotels will "take a tough take a look at how they can allow commerce and deals through agentic [AI]"" [Brands] can construct on the trust they currently have if they do an excellent 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 booking, bigger multibrand hotel business will "embed LLMs into their own brand name sites and mobile apps, and change the way the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result which numerous brand names 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 item marketing at AI customer experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers require to guarantee their property details is being indexed by LLMs to appear in tourist queries.