Why Hospitality Brand Share Will Be Rising

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

And through it all, hotel companies are expected to fortify their portfolios with new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from differing corners of the market about their 2026 predictions. Below are the top patterns anticipated to impact hotel operations, performance, net system development and more this year.

Total wages, salaries and advantages paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is forecasted to climb to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor costs posture an obstacle to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute issue." Rising labor costs have been a challenge for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, surpassing the 12.8% growth in total operating revenue, according to AHLA. Over the last few years, countless union hotel workers have gone on strike requiring greater wages in order to keep up with the increasing cost 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 settlements will be "front and center" in New York 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.

"Need has actually not kept up with this pace," she stated. Incomes, incomes and payroll-related expenditures paid by hotels now account for more than 32% of overall earnings, according to AHLA.

Modern Hospitality Industry Trends Fueling Future Success

As more hotel visitors turn to synthetic intelligence to boost their travel experience, reserving hotels straight through big language designs (LLMs) may be next, hospitality experts stated. Agentic commerce a procedure by which autonomous AI agents act upon behalf of a consumer to discover, compare and finish purchases is a pattern that has sped up across markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're most likely to utilize AI for travel recommendations. A smaller sized percentage (57%) said they 'd be most likely to use it for booking travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of consumers that are searching [by means of LLMs] for product or services in travel has actually ballooned in the last 12 months and is speeding up every day," Kletzel said, adding that undoubtedly, hotels will "take a tough take a look at how they can allow commerce and transactions through agentic [AI]"" [Brands] can develop on the trust they currently have if they do a terrific task with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct booking, bigger multibrand hotel companies will "embed LLMs into their own brand sites and mobile apps, and alter the way the customer searches," Kletzel said.

"If you are not visible in an LLM search result which lots of brands aren't, and this is the huge 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 consumer experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers require to guarantee their residential or commercial property info is being indexed by LLMs to appear in tourist inquiries.