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, hospitality industry leaders are looking toward 2026 with cautious optimism. Rising functional costs are slated to challenge owners this year and lower-tier segments could have a hard time amidst a growing wealth bifurcation.

And through everything, hotel business are anticipated to strengthen their portfolios with new brand offerings and partnerships. As the year gets underway, Hotel Dive consulted with hospitality leaders from differing corners of the market about their 2026 forecasts. Below are the leading patterns expected to effect hotel operations, performance, net system development and more this year.

Total incomes, wages and benefits paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is forecasted to climb to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, rising labor costs present 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 outright issue." Increasing labor expenses have actually been an obstacle for hoteliers for several years, Davis stated, especially following the COVID-19 pandemic. In general, hotel labor expenses have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% development in overall operating earnings, according to AHLA. In the last few years, thousands of union hotel employees have gone on strike demanding higher earnings 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 by means of Getty Images In 2026, Davis noted, 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 City is set to end in July.

Last year, the union backed New york city City's freshly chosen Mayor Zorhan Mamdani, who worked on a pledge to raise New York City's base pay to $30 per hour by 2030. Hotel market associations, including AHLA, have knocked comparable legislation throughout the nation, consisting of the recently passed $30 wage ordinance in Los Angeles. "Demand has not kept up with this rate," she said. Wages, earnings and payroll-related expenses paid by hotels now account for more than 32% of total income, according to AHLA.

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As more hotel visitors turn to synthetic intelligence to enhance their travel experience, booking hotels directly through large language models (LLMs) may be next, hospitality specialists stated. Agentic commerce a process by which autonomous AI representatives act upon behalf of a consumer to discover, compare and complete purchases is a pattern that has sped up across industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're most 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 product marketing at Talkdesk To stay competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand name websites and mobile apps, and change the way the customer searches," Kletzel stated.

"If you are not visible in an LLM search 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 product marketing at AI customer experience platform Talkdesk, similarly told Hotel Dive that hospitality players require to guarantee their residential or commercial property info is being indexed by LLMs to appear in traveler questions.