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, hospitality market leaders are looking toward 2026 with cautious optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier segments could have a hard time in the middle of a growing wealth bifurcation.

And through it all, hotel companies are anticipated to strengthen their portfolios with brand-new brand offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from differing corners of the industry about their 2026 forecasts. Below are the top trends expected to impact hotel operations, performance, net unit development and more this year.

Total incomes, earnings 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 forecasted to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, rising labor expenses present a challenge to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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Increasing labor costs have actually been an obstacle for hoteliers for years, Davis said, particularly following the COVID-19 pandemic. In general, hotel labor expenses have increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in total operating earnings, 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 Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City City is set to end in July.

Last year, the union backed New york city City's recently chosen Mayor Zorhan Mamdani, who operated on a promise to raise New york city City's minimum wage to $30 per hour by 2030. Hotel industry associations, consisting of 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 rate," she said. Incomes, wages and payroll-related expenditures paid by hotels now account for more than 32% of total profits, according to AHLA.

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As more hotel guests turn to artificial intelligence to improve their travel experience, scheduling hotels straight through large language models (LLMs) may be next, hospitality experts said. Agentic commerce a procedure by which self-governing AI representatives act upon behalf of a consumer to find, compare and finish purchases is a pattern that has sped up throughout markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're likely to use 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 product marketing at Talkdesk To stay competitive with direct booking, larger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and alter the way the consumer searches," Kletzel stated.

"If you are not visible in an LLM search engine result which lots of brand names aren't, and this is the big panic that they're all going through today consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI customer experience platform Talkdesk, likewise informed Hotel Dive that hospitality gamers need to ensure their residential or commercial property information is being indexed by LLMs to appear in traveler questions.