Expert Ways to Boost Brand Share via Expansion

Listen to the short article 17 minutes This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad economic uncertainty that stifled development for hotels, hospitality market leaders are looking toward 2026 with mindful optimism. Rising operational costs are slated to challenge owners this year and lower-tier sections could struggle in the middle of a growing wealth bifurcation.

And through everything, hotel companies are expected to fortify their portfolios with brand-new brand 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 effect hotel operations, performance, net system growth and more this year.

Total wages, salaries and benefits paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, rising labor expenses position an obstacle to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

How to Grow Your Restaurant Group Rapidly

"It is an absolute issue." Increasing labor expenses have actually been a difficulty for hoteliers for many years, Davis stated, especially following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, surpassing the 12.8% development in overall operating earnings, according to AHLA. Over the last few years, thousands of union hotel workers have gone on strike demanding higher incomes in order to stay up to date with the rising 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 City, where the New York Hotel and Gaming Trades Council's union agreement with the Hotel Association of New York City is set to end in July.

"Need has actually not kept up with this speed," she said. "We're likewise seeing these difficulties compounded by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City Safe Hotels Act. When demand is falling and expenses are soaring, the math merely does not include up." Salaries, wages and payroll-related expenses paid by hotels now account for more than 32% of total profits, according to AHLA.

Smart Ways to Boost Brand Share via Expansion

As more hotel guests turn to expert system to boost their travel experience, scheduling hotels straight through large language designs (LLMs) might be next, hospitality professionals stated. Agentic commerce a procedure by which autonomous AI agents act upon behalf of a customer to discover, compare and finish purchases is a pattern that has accelerated across markets 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. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand name websites and mobile apps, and alter the way the consumer searches," Kletzel stated.

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