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, hospitality market leaders are looking toward 2026 with careful optimism. Rising functional costs are slated to challenge owners this year and lower-tier sectors could struggle in the middle of a growing wealth bifurcation.

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

Overall incomes, incomes and advantages paid by U.S. hotels increased 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 boost, per AHLA. For hotel owners, rising labor expenses posture a challenge to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an outright concern." Increasing labor expenses have been an obstacle for hoteliers for many years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in total operating earnings, according to AHLA. Recently, countless union hotel workers have gone on strike requiring greater incomes in order to stay up to date 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 kept in mind, union settlements will be "front and center" in New york city City, where the New York Hotel and Gaming Trades Council's union agreement with the Hotel Association of New York City is set to end in July.

Last year, the union backed New york city City's newly chosen Mayor Zorhan Mamdani, who operated on a promise to raise New york city City's minimum wage to $30 per hour by 2030. Hotel industry associations, including AHLA, have knocked comparable legislation across the country, including the just recently passed $30 wage regulation in Los Angeles. "Demand has actually not kept up with this rate," she said. Salaries, incomes and payroll-related costs paid by hotels now account for more than 32% of total revenue, according to AHLA.

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As more hotel visitors turn to synthetic intelligence to enhance their travel experience, scheduling hotels directly through large language designs (LLMs) might be next, hospitality specialists stated. Agentic commerce a procedure by which self-governing AI agents act on behalf of a consumer to find, compare and finish purchases is a pattern that has accelerated across markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're likely to use AI for travel recommendations. A smaller sized percentage (57%) stated they 'd be most likely to utilize it for reserving travel. But that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The number of consumers that are browsing [by means of LLMs] for products and services in travel has swollen in the last 12 months and is speeding up every day," Kletzel stated, including that undoubtedly, hotels will "take a hard appearance at how they can make it possible for commerce and deals through agentic [AI]"" [Brands] can construct on the trust they already have if they do a great job with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct booking, larger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and alter the method the consumer searches," Kletzel stated.

"If you are not visible in an LLM search results page which many brand names aren't, and this is the big panic that they're all going through right now consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI customer experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to ensure their home details is being indexed by LLMs to appear in tourist inquiries.