Proven Steps for Hospitality Brand Expansion

, hospitality market leaders are looking towards 2026 with mindful optimism. Rising operational expenses are slated to challenge owners this year and lower-tier segments could have a hard time amidst a growing wealth bifurcation.

And through it all, hotel companies are anticipated to strengthen their portfolios with new brand name offerings and partnerships. As the year gets underway, Hotel Dive talked to hospitality leaders from varying corners of the market about their 2026 predictions. Below are the leading trends anticipated to effect hotel operations, performance, net system growth and more this year.

Total salaries, earnings and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shown 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 a challenge to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute concern." Rising labor expenses have been an obstacle for hoteliers for several years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in overall operating profits, according to AHLA. Over the last few years, countless union hotel employees have gone on strike demanding higher incomes 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 via Getty Images In 2026, Davis kept in mind, union negotiations 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.

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 base pay to $30 per hour by 2030. Hotel market associations, including AHLA, have denounced comparable legislation throughout the nation, consisting of the recently passed $30 wage regulation in Los Angeles. "Need has not stayed up to date with this rate," she said. "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 need is falling and expenses are soaring, the math simply does not include up." Wages, salaries and payroll-related expenditures paid by hotels now account for more than 32% of overall revenue, according to AHLA.

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As more hotel visitors turn to artificial intelligence to enhance their travel experience, scheduling hotels straight through large language models (LLMs) might be next, hospitality specialists said. Agentic commerce a procedure by which self-governing AI representatives act on 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 utilize AI for travel suggestions. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, bigger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and change the way the consumer searches," Kletzel stated.

"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 customers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI client experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers need to guarantee their residential or commercial property info is being indexed by LLMs to appear in traveler queries.