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, hospitality market leaders are looking towards 2026 with careful optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier sectors might have a hard time in the middle of a growing wealth bifurcation.

And through it all, hotel business are expected to strengthen their portfolios with brand-new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying corners of the industry about their 2026 predictions. Below are the top patterns expected to effect hotel operations, efficiency, net unit development and more this year.

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

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"It is an outright concern." Rising labor costs have actually been a difficulty for hoteliers for many years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, surpassing the 12.8% development in overall operating profits, according to AHLA. In current years, countless union hotel employees have gone on strike demanding greater incomes in order to stay up to date with the increasing expense 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 kept in mind, union settlements will be "front and center" in New York City, where the New York City Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City City is set to expire in July.

In 2015, the union backed New York City's freshly elected Mayor Zorhan Mamdani, who operated on a guarantee to raise New York City's base pay to $30 per hour by 2030. Hotel market associations, including AHLA, have knocked similar legislation throughout the nation, including the just recently passed $30 wage regulation in Los Angeles. "Demand has not kept up with this speed," she said. "We're likewise seeing these challenges compounded 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 does not accumulate." Incomes, salaries and payroll-related costs paid by hotels now represent more than 32% of overall earnings, according to AHLA.

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As more hotel visitors turn to expert system to enhance their travel experience, booking hotels straight through big language models (LLMs) might be next, hospitality specialists said. Agentic commerce a procedure by which autonomous AI representatives act upon behalf of a customer to discover, compare and finish purchases is a trend that has actually sped up throughout markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're most likely to use AI for travel suggestions. A smaller portion (57%) said they 'd be most likely to utilize it for scheduling travel. However that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The number of customers that are browsing [via LLMs] for product or services in travel has actually ballooned in the last 12 months and is speeding up every day," Kletzel said, adding that undoubtedly, hotels will "take a hard take a look at how they can enable commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they already have if they do a fantastic task with how they handle AI in 2026." 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 sites and mobile apps, and change the way the customer searches," Kletzel stated.

"If you are not visible in an LLM search engine result which many 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 said. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, likewise informed Hotel Dive that hospitality players require to guarantee their home info is being indexed by LLMs to appear in tourist inquiries.