Comparing Leading Franchise Models for Growth

, hospitality industry leaders are looking toward 2026 with cautious optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier segments might have a hard time amidst a growing wealth bifurcation.

And through everything, hotel companies are anticipated to strengthen their portfolios with brand-new brand name offerings and collaborations. As the year gets underway, Hotel Dive consulted with hospitality leaders from varying corners of the industry about their 2026 predictions. Below are the top trends anticipated to effect hotel operations, efficiency, net system growth and more this year.

Total salaries, incomes and advantages paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shown 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, increasing labor expenses pose a difficulty to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

How to Grow Your Restaurant Group Efficiently

Rising labor costs have been a challenge for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% development in total operating income, according to AHLA.

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, where the New York City Hotel and Gaming Trades Council's union agreement with the Hotel Association of New York City is set to expire in July.

In 2015, the union backed New york city City's newly chosen Mayor Zorhan Mamdani, who operated on a pledge to raise New York City's minimum wage to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have actually denounced comparable legislation throughout the country, consisting of the recently passed $30 wage ordinance in Los Angeles. "Need has actually not kept up with this rate," she said. "We're also seeing these obstacles 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 costs are skyrocketing, the math merely doesn't add up." Incomes, wages and payroll-related expenditures paid by hotels now account for more than 32% of overall profits, according to AHLA.

Strategic Steps for Hospitality Corporate Scaling

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 professionals stated. Agentic commerce a process by which self-governing AI representatives act on behalf of a customer to find, compare and complete purchases is a trend that has actually sped up across industries like retail.

Freddy's Frozen Custard & Steakburgers

According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're likely to utilize AI for travel suggestions. A smaller percentage (57%) said they 'd be most likely to use it for booking travel. However that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The number of consumers that are browsing [via LLMs] for product or services in travel has actually ballooned in the last 12 months and is accelerating every day," Kletzel stated, including that undoubtedly, hotels will "take a tough look at how they can enable commerce and deals through agentic [AI]"" [Brands] can construct on the trust they already have if they do a terrific task with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct reservation, bigger multibrand hotel business will "embed LLMs into their own brand name sites and mobile apps, and change the method the consumer searches," Kletzel said.

"If you are not visible in an LLM search engine result which many brands aren't, and this is the huge panic that they're all going through today customers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality product marketing at AI consumer experience platform Talkdesk, similarly told Hotel Dive that hospitality players require to guarantee their property details is being indexed by LLMs to appear in traveler queries.