The Future of 2026 Brand Expansion Strategies

, hospitality market leaders are looking towards 2026 with careful optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier sectors could struggle in the middle of a growing wealth bifurcation.

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

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

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Increasing labor costs have been a challenge for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in overall operating earnings, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan through Getty Images In 2026, Davis kept in mind, union negotiations will be "front and center" in New york city 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 end in July.

Last year, the union backed New York City's newly elected Mayor Zorhan Mamdani, who ran on a pledge to raise New York City's base pay to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have actually knocked similar legislation across the nation, including the recently passed $30 wage ordinance in Los Angeles. "Need has actually not kept up with this speed," she said. Salaries, salaries and payroll-related expenditures paid by hotels now account for more than 32% of overall profits, according to AHLA.

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As more hotel visitors turn to artificial intelligence to boost their travel experience, reserving hotels directly through big language designs (LLMs) might be next, hospitality experts stated. Agentic commerce a process by which self-governing AI representatives act on behalf of a customer to discover, compare and finish purchases is a trend that has actually sped up throughout industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're most likely to utilize AI for travel recommendations. A smaller portion (57%) stated they 'd be most likely to use it for booking travel. But that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The number of consumers that are browsing [by means of LLMs] for services and products in travel has ballooned in the last 12 months and is speeding up every day," Kletzel said, adding that inevitably, hotels will "take a difficult take a look at how they can enable commerce and transactions through agentic [AI]"" [Brands] can build on the trust they already have if they do a great task with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct reservation, bigger multibrand hotel business will "embed LLMs into their own brand sites and mobile apps, and change the way the customer searches," Kletzel said.

"If you are not visible in an LLM search result which lots of brand names aren't, and this is the big panic that they're all going through right now consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI customer 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 inquiries.