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Listen to the post 17 min This audio is auto-generated. Please let us know if you have feedback. Following a year of broad financial uncertainty that suppressed growth for hotels, hospitality industry leaders are looking towards 2026 with mindful optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier sections could have a hard time amid a growing wealth bifurcation.

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

Overall salaries, salaries 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 projected to climb to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses position a challenge to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute concern." Increasing labor expenses have actually been an obstacle for hoteliers for many years, Davis said, especially following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in total operating earnings, according to AHLA. In the last few years, countless union hotel workers have actually gone on strike requiring greater wages 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 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.

In 2015, the union backed New York City's recently chosen Mayor Zorhan Mamdani, who operated on a guarantee to raise New York City's base pay to $30 per hour by 2030. Hotel market associations, including AHLA, have actually denounced comparable legislation throughout the country, including the recently passed $30 wage regulation in Los Angeles. "Demand has actually not stayed up to date with this pace," she stated. "We're likewise seeing these obstacles intensified by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City City Safe Hotels Act. When demand is falling and costs are skyrocketing, the mathematics just doesn't include up." Salaries, incomes and payroll-related expenditures paid by hotels now account for more than 32% of overall income, according to AHLA.

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As more hotel guests turn to expert system to enhance their travel experience, booking hotels directly through big language designs (LLMs) might be next, hospitality specialists said. Agentic commerce a procedure by which autonomous AI representatives act on behalf of a consumer to find, compare and finish purchases is a trend that has actually accelerated throughout markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're likely to utilize AI for travel recommendations. A smaller sized percentage (57%) stated they 'd be likely to utilize it for reserving travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The number of customers that are browsing [through LLMs] for product or services in travel has swollen in the last 12 months and is speeding up every day," Kletzel stated, including that inevitably, hotels will "take a tough appearance at how they can enable commerce and deals through agentic [AI]"" [Brands] can construct on the trust they already have if they do a fantastic task with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, bigger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and alter the way the customer searches," Kletzel stated.

"If you are not visible in an LLM search engine result which many brands aren't, and this is the big 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 consumer experience platform Talkdesk, similarly informed Hotel Dive that hospitality players require to ensure their residential or commercial property info is being indexed by LLMs to appear in tourist questions.