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Listen to the article 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad economic unpredictability that stifled growth for hotels, hospitality industry leaders are looking towards 2026 with cautious optimism. Rising functional expenses are slated to challenge owners this year and lower-tier sections might struggle amid a growing wealth bifurcation.

And through it all, hotel companies are expected to fortify their portfolios with brand-new brand name offerings and collaborations. As the year gets underway, Hotel Dive talked to hospitality leaders from varying corners of the industry about their 2026 forecasts. Below are the top trends anticipated to effect hotel operations, efficiency, net unit growth and more this year.

Overall salaries, salaries and advantages 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 predicted to reach $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses posture a challenge to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an absolute issue." Rising labor costs have actually been a challenge for hoteliers for several 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 profits, according to AHLA. Over the last few years, thousands of union hotel workers have gone on strike requiring higher salaries in order to stay up to date with the rising cost 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 kept in mind, union settlements will be "front and center" in New York City, where the New York Hotel and Video gaming Trades Council's union contract with the Hotel Association of New York City is set to expire in July.

Last year, the union backed New York City's newly chosen Mayor Zorhan Mamdani, who operated on a pledge to raise New York City's minimum wage to $30 per hour by 2030. Hotel market associations, consisting of AHLA, have knocked similar legislation across the nation, consisting of the recently passed $30 wage regulation in Los Angeles. "Demand has not stayed up to date with this speed," she stated. "We're also seeing these challenges compounded by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City Safe Hotels Act. When need is falling and costs are skyrocketing, the mathematics just doesn't accumulate." Salaries, earnings and payroll-related expenditures paid by hotels now represent more than 32% of total income, according to AHLA.

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As more hotel guests turn to synthetic intelligence to improve their travel experience, reserving hotels straight through large language designs (LLMs) may be next, hospitality experts said. Agentic commerce a process by which autonomous AI agents act on behalf of a consumer to find, compare and finish purchases is a pattern 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 utilize AI for travel recommendations. 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 booking, larger multibrand hotel companies will "embed LLMs into their own brand name sites and mobile apps, and change 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 right now customers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality product marketing at AI customer experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers need to ensure their residential or commercial property details is being indexed by LLMs to appear in tourist questions.