Evaluating Top Investment Schemes for Growth

, hospitality industry leaders are looking towards 2026 with careful optimism. Rising operational costs are slated to challenge owners this year and lower-tier segments might struggle amidst a growing wealth bifurcation.

And through all of it, hotel business are expected to strengthen their portfolios with new brand offerings and partnerships. As the year gets underway, Hotel Dive spoke to hospitality leaders from differing corners of the industry about their 2026 forecasts. Below are the top trends expected to effect hotel operations, efficiency, net system development and more this year.

Total wages, wages 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 predicted to climb up to $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, increasing labor expenses present a difficulty to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

Modern Restaurant Market Trends Fueling 2026 Success

Rising labor expenses have actually been an obstacle for hoteliers for years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have increased 15.3% from 2019 to 2025, exceeding the 12.8% development in total operating revenue, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan via 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 is set to end in July.

In 2015, the union backed New York City's freshly chosen Mayor Zorhan Mamdani, who ran on a promise to raise New york city City's base pay to $30 per hour by 2030. Hotel market associations, consisting of AHLA, have actually knocked similar legislation throughout the nation, including the recently passed $30 wage ordinance in Los Angeles. "Need has not stayed up to date with this speed," she stated. "We're likewise seeing these challenges intensified by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City City Safe Hotels Act. When demand is falling and costs are soaring, the math just does not accumulate." Incomes, salaries and payroll-related costs paid by hotels now represent more than 32% of total revenue, according to AHLA.

Top Profitable Franchise Opportunities for the Future

As more hotel visitors turn to expert system to enhance their travel experience, scheduling hotels directly through big language models (LLMs) might be next, hospitality experts said. Agentic commerce a procedure by which self-governing AI representatives act on behalf of a consumer to find, compare and complete purchases is a pattern that has accelerated across industries like retail.

Freddy's Frozen Custard & Steakburgers

According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're most likely to utilize AI for travel recommendations. A smaller sized portion (57%) stated they 'd be likely to use it for reserving 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 [through LLMs] for product or services in travel has actually swollen in the last 12 months and is accelerating every day," Kletzel said, including that undoubtedly, hotels will "take a hard take a look at how they can enable commerce and deals through agentic [AI]"" [Brands] can develop on the trust they currently have if they do a fantastic job with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct booking, larger multibrand hotel business will "embed LLMs into their own brand sites and mobile apps, and alter the method the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result which lots of brand names aren't, and this is the huge panic that they're all going through today consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers require to guarantee their residential or commercial property details is being indexed by LLMs to appear in tourist inquiries.