Will Hospitality Investments Be Lucrative in 2026?

, hospitality market leaders are looking towards 2026 with cautious optimism. Increasing operational costs are slated to challenge owners this year and lower-tier segments could have a hard time in the middle of a growing wealth bifurcation.

And through all of it, hotel business are expected to strengthen their portfolios with brand-new brand name offerings and partnerships. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying corners of the market about their 2026 forecasts. Below are the leading patterns anticipated to impact hotel operations, efficiency, net unit development and more this year.

Overall incomes, earnings and advantages paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is projected to reach $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.

Major Global Milestones in Hospitality Expansion

Rising labor expenses have been an obstacle for hoteliers for years, Davis said, particularly following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in total operating profits, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan by means of Getty Images In 2026, Davis noted, union negotiations will be "front and center" in New York City, where the New York City Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City is set to end in July.

In 2015, the union backed New york city City's freshly chosen Mayor Zorhan Mamdani, who ran on a pledge to raise New york city City's base pay to $30 per hour by 2030. Hotel market associations, including AHLA, have actually denounced comparable legislation across the country, consisting of the recently passed $30 wage regulation in Los Angeles. "Demand has actually not kept up with this rate," she stated. Salaries, salaries and payroll-related expenditures paid by hotels now account for more than 32% of overall revenue, according to AHLA.

Strategic Steps for Restaurant Corporate Expansion

As more hotel guests turn to synthetic intelligence to improve their travel experience, reserving hotels directly through large language designs (LLMs) might be next, hospitality specialists said. Agentic commerce a process by which autonomous AI representatives act upon behalf of a customer to find, compare and complete purchases is a trend that has actually accelerated across markets like retail.

Freddy's Frozen Custard & Steakburgers

According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're most likely to use AI for travel recommendations. A smaller portion (57%) stated they 'd be most likely to use it for scheduling travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The number of customers that are browsing [by means of LLMs] for services and products in travel has ballooned in the last 12 months and is accelerating every day," Kletzel said, adding that undoubtedly, hotels will "take a tough appearance at how they can enable commerce and deals through agentic [AI]"" [Brands] can build on the trust they currently have if they do a great job with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct booking, bigger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and change the way the consumer searches," Kletzel said.

"If you are not visible in an LLM search results page which lots of brand names aren't, and this is the big panic that they're all going through today customers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality product marketing at AI consumer experience platform Talkdesk, likewise informed Hotel Dive that hospitality gamers need to ensure their property info is being indexed by LLMs to appear in tourist queries.