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, hospitality market leaders are looking towards 2026 with careful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier sections could struggle amid a growing wealth bifurcation.

And through everything, hotel companies are anticipated to fortify their portfolios with brand-new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from differing corners of the market about their 2026 forecasts. Below are the leading patterns expected to impact hotel operations, efficiency, net system growth and more this year.

Overall wages, incomes and benefits paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is projected to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, rising labor costs present a difficulty to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an outright concern." Increasing labor expenses have actually been an obstacle for hoteliers for years, Davis said, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% development in overall operating income, according to AHLA. Recently, thousands of union hotel workers have actually gone on strike demanding greater salaries in order to stay up to date with the rising cost of living in places such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan by means of Getty Images In 2026, Davis noted, 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.

"Need has actually not stayed up to date with this speed," she said. "We're also seeing these challenges compounded by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City City Safe Hotels Act. When demand is falling and expenses are skyrocketing, the mathematics merely does not build up." Salaries, incomes and payroll-related costs paid by hotels now represent more than 32% of overall income, according to AHLA.

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As more hotel visitors turn to synthetic intelligence to improve their travel experience, scheduling hotels straight through large language models (LLMs) may be next, hospitality professionals said. Agentic commerce a procedure by which self-governing AI agents act upon behalf of a consumer to find, compare and complete purchases is a trend that has accelerated across industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're most likely to use AI for travel suggestions. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. 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 alter the method the consumer searches," Kletzel stated.

"If you are not visible in an LLM search result which many 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 product marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers need to ensure their residential or commercial property information is being indexed by LLMs to appear in tourist inquiries.