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Listen to the post 17 min This audio is auto-generated. Please let us know if you have feedback. Following a year of broad economic uncertainty that suppressed development for hotels, hospitality industry leaders are looking towards 2026 with careful optimism. Increasing operational costs are slated to challenge owners this year and lower-tier segments might have a hard time in the middle of a growing wealth bifurcation.

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

Overall incomes, salaries and benefits paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is forecasted to climb to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses posture a difficulty to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an outright issue." Rising labor expenses have actually been a challenge for hoteliers for many years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in overall operating earnings, according to AHLA. Recently, countless union hotel employees have gone on strike requiring greater wages in order to keep up with the rising expense of living in locations such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan by means of Getty Images In 2026, Davis kept in mind, union negotiations will be "front and center" in New york city City, where the New York Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City City is set to end in July.

Last year, the union backed New york city City's newly chosen Mayor Zorhan Mamdani, who ran on a pledge to raise New York City's base pay to $30 per hour by 2030. Hotel market associations, including AHLA, have actually knocked comparable legislation across the country, consisting of the just recently passed $30 wage ordinance in Los Angeles. "Demand has actually not stayed up to date with this rate," she stated. "We're also seeing these challenges intensified by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City Safe Hotels Act. When need is falling and costs are skyrocketing, the math just doesn't add up." Wages, incomes and payroll-related expenditures paid by hotels now account for more than 32% of overall income, according to AHLA.

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As more hotel guests turn to artificial intelligence to boost their travel experience, scheduling hotels directly through large language designs (LLMs) might be next, hospitality professionals said. Agentic commerce a process by which self-governing AI agents act upon behalf of a customer to find, compare and complete purchases is a trend 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 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 product marketing at Talkdesk To remain competitive with direct booking, bigger multibrand hotel companies will "embed LLMs into their own brand sites and mobile apps, and alter the way the customer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result which lots of brands aren't, and this is the big panic that they're all going through right now 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 need to guarantee their residential or commercial property information is being indexed by LLMs to appear in tourist queries.