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, hospitality industry leaders are looking towards 2026 with cautious optimism. Rising functional costs are slated to challenge owners this year and lower-tier sectors could have a hard time amid a growing wealth bifurcation.

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

Overall wages, wages and advantages 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 an approximately 3% year-over-year increase, per AHLA. For hotel owners, rising labor costs present an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

Evaluating Top Franchise Schemes for 2026

"It is an absolute concern." Rising labor costs have been a difficulty for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, outpacing the 12.8% development in total operating income, according to AHLA. Over the last few years, thousands of union hotel workers have actually gone on strike demanding higher earnings in order to stay up to date with the rising expense of living in locations such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan through 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 contract with the Hotel Association of New York City is set to end in July.

"Need has actually not kept up with this speed," she stated. "We're also seeing these obstacles compounded by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City Safe Hotels Act. When need is falling and expenses are soaring, the mathematics just doesn't add up." Salaries, salaries and payroll-related expenses paid by hotels now account for more than 32% of total income, according to AHLA.

Comparing Top Franchise Schemes for 2026

As more hotel guests turn to expert system to improve their travel experience, reserving hotels directly through big language models (LLMs) may be next, hospitality experts said. Agentic commerce a process by which self-governing AI agents act upon behalf of a consumer to find, compare and finish purchases is a pattern that has accelerated throughout industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're likely to use AI for travel suggestions. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, bigger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and alter the method the customer searches," Kletzel said.

"If you are not visible in an LLM search engine result which lots of 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 stated. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, similarly told Hotel Dive that hospitality players require to ensure their residential or commercial property information is being indexed by LLMs to appear in traveler queries.