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Listen to the article 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad financial unpredictability that stifled growth 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 might have a hard time amidst a growing wealth bifurcation.

And through everything, hotel business are anticipated to fortify their portfolios with new brand offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from varying corners of the industry about their 2026 predictions. Below are the top patterns anticipated to effect hotel operations, performance, net system growth and more this year.

Overall incomes, wages and advantages 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 reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, rising labor expenses pose an obstacle to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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

3, 2024 in San Francisco, California. Justin Sullivan via 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 Video gaming Trades Council's union contract with the Hotel Association of New York City is set to expire in July.

In 2015, the union backed New york city City's freshly elected Mayor Zorhan Mamdani, who operated on a promise to raise New York City's minimum wage to $30 per hour by 2030. Hotel industry associations, including AHLA, have denounced comparable legislation throughout the country, including the recently passed $30 wage regulation in Los Angeles. "Need has not kept up with this pace," she stated. Salaries, earnings and payroll-related costs paid by hotels now account for more than 32% of overall revenue, according to AHLA.

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As more hotel visitors turn to artificial intelligence to boost their travel experience, scheduling hotels straight through large language designs (LLMs) may be next, hospitality specialists stated. Agentic commerce a procedure by which self-governing AI agents act on behalf of a customer to discover, compare and complete purchases is a trend that has accelerated across industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're likely to utilize AI for travel recommendations. A smaller sized portion (57%) stated they 'd be likely to utilize it for reserving travel. But that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The variety of customers that are browsing [through LLMs] for services and products in travel has swollen in the last 12 months and is accelerating every day," Kletzel stated, adding that inevitably, hotels will "take a hard look at how they can enable commerce and deals through agentic [AI]"" [Brands] can develop on the trust they already have if they do a fantastic task with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and alter the method the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search result which numerous brands aren't, and this is the huge 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 client experience platform Talkdesk, similarly told Hotel Dive that hospitality players need to guarantee their property info is being indexed by LLMs to appear in tourist questions.