Identifying Profitable Business Investments in 2026

, hospitality market leaders are looking toward 2026 with cautious optimism. Increasing operational 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 fortify their portfolios with new brand name offerings and collaborations. As the year gets underway, Hotel Dive consulted with hospitality leaders from varying corners of the industry about their 2026 predictions. Below are the top patterns expected to impact hotel operations, performance, net system development and more this year.

Overall incomes, wages and advantages paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is projected to reach $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, rising labor costs position a challenge to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

Targeting Profitable Hospitality Ventures in 2026

"It is an outright issue." Increasing labor costs have actually been an obstacle for hoteliers for several years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor expenses have increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in overall operating profits, according to AHLA. Over the last few years, countless union hotel workers have gone on strike requiring higher salaries in order to keep up with the increasing expense of living in places 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 Video gaming Trades Council's union contract with the Hotel Association of New York City City is set to expire in July.

In 2015, the union backed New york city City's recently elected Mayor Zorhan Mamdani, who ran on a promise to raise New york city City's base pay to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have actually knocked similar legislation across the nation, consisting of the recently passed $30 wage regulation in Los Angeles. "Demand has not kept up with this rate," she said. Salaries, salaries and payroll-related expenses paid by hotels now account for more than 32% of total income, according to AHLA.

The Future of 2026 Corporate Expansion Strategies

As more hotel guests turn to synthetic intelligence to boost their travel experience, booking hotels directly through large language models (LLMs) might be next, hospitality professionals stated. Agentic commerce a process by which autonomous AI agents act on behalf of a customer to find, compare and complete purchases is a trend that has accelerated throughout industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're likely to use AI for travel recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct booking, larger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and change the method the consumer searches," Kletzel stated.

"If you are not discoverable in an LLM search engine result which lots of brands aren't, and this is the big 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 product marketing at AI consumer experience platform Talkdesk, similarly informed Hotel Dive that hospitality gamers need to guarantee their residential or commercial property info is being indexed by LLMs to appear in traveler inquiries.