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, hospitality industry leaders are looking towards 2026 with cautious optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier sectors might struggle amidst a growing wealth bifurcation.

And through all of it, hotel companies are expected to strengthen their portfolios with brand-new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying corners of the industry about their 2026 forecasts. Below are the leading patterns expected to effect hotel operations, performance, net system development and more this year.

Overall incomes, salaries 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 projected to climb to $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, rising labor expenses pose a challenge to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright concern." Rising labor costs have actually been a difficulty for hoteliers for many years, Davis stated, especially following the COVID-19 pandemic. In general, hotel labor costs have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% development in total operating revenue, according to AHLA. Over the last few years, thousands of union hotel employees have gone on strike requiring greater earnings 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 via Getty Images In 2026, Davis kept in mind, union settlements will be "front and center" in New york city City, where the New York City Hotel and Video gaming Trades Council's union agreement with the Hotel Association of New York City is set to end in July.

"Need has actually not kept up with this pace," she said. Wages, salaries and payroll-related expenses paid by hotels now account for more than 32% of overall earnings, according to AHLA.

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As more hotel guests turn to expert system to enhance their travel experience, reserving hotels directly through large language models (LLMs) may be next, hospitality professionals stated. Agentic commerce a procedure by which autonomous AI agents act upon behalf of a consumer to discover, compare and complete purchases is a trend that has actually sped up across industries like retail.

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

"If you are not visible in an LLM search result which lots of brands aren't, and this is the big panic that they're all going through today consumers 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 informed Hotel Dive that hospitality gamers need to guarantee their residential or commercial property info is being indexed by LLMs to appear in traveler queries.