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Listen to the post 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad financial uncertainty that stifled growth for hotels, hospitality market leaders are looking towards 2026 with cautious optimism. Increasing functional costs are slated to challenge owners this year and lower-tier sectors might struggle in the middle of a growing wealth bifurcation.

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

Overall salaries, salaries and advantages paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is forecasted to climb to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses position a difficulty to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an outright concern." Rising labor expenses have actually been a challenge for hoteliers for many years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in total operating profits, according to AHLA. Recently, countless union hotel employees have actually gone on strike demanding greater earnings in order to stay up to date with the rising expense 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 City, where the New York City Hotel and Video gaming Trades Council's union contract with the Hotel Association of New York City is set to expire in July.

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

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As more hotel visitors turn to artificial intelligence to boost their travel experience, booking hotels directly through large language models (LLMs) might be next, hospitality specialists said. Agentic commerce a procedure by which self-governing AI agents act on behalf of a customer to discover, compare and finish purchases is a pattern that has accelerated throughout markets 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 recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct booking, larger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and change the way the customer searches," Kletzel stated.

"If you are not visible in an LLM search engine result which numerous 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 client experience platform Talkdesk, similarly informed Hotel Dive that hospitality players need to guarantee their home details is being indexed by LLMs to appear in tourist queries.