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Listen to the post 17 minutes This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad financial unpredictability that suppressed development for hotels, hospitality market leaders are looking towards 2026 with cautious optimism. Rising operational expenses are slated to challenge owners this year and lower-tier sections could have a hard time amid a growing wealth bifurcation.

And through all of it, hotel business are expected to fortify 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 market about their 2026 predictions. Below are the top trends expected to impact hotel operations, efficiency, net unit development and more this year.

Total salaries, salaries and benefits paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, rising labor expenses posture a difficulty to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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Rising labor expenses have been a difficulty for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. In general, hotel labor expenses have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in overall operating revenue, according to AHLA.

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

In 2015, the union backed New york city City's recently elected Mayor Zorhan Mamdani, who ran on a promise to raise New york city City's base pay to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have actually denounced comparable legislation throughout the country, including the just recently passed $30 wage regulation in Los Angeles. "Demand has not kept up with this rate," she said. "We're also seeing these difficulties compounded by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City City Safe Hotels Act. When need is falling and expenses are skyrocketing, the math simply does not include up." Incomes, earnings and payroll-related expenditures paid by hotels now represent more than 32% of overall profits, according to AHLA.

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As more hotel guests turn to synthetic intelligence to boost their travel experience, scheduling hotels straight through big language designs (LLMs) may be next, hospitality professionals stated. Agentic commerce a process by which autonomous AI agents act on behalf of a consumer to discover, compare and complete purchases is a pattern 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 likely to utilize 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 booking, bigger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and change the way the consumer searches," Kletzel stated.

"If you are not discoverable in an LLM search results page which numerous brands aren't, and this is the huge 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, similarly told Hotel Dive that hospitality players require to ensure their property information is being indexed by LLMs to appear in traveler questions.