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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 stifled development for hotels, hospitality industry leaders are looking towards 2026 with careful optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier sectors could struggle amidst a growing wealth bifurcation.

And through everything, hotel business are anticipated to strengthen their portfolios with new brand name 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 top patterns expected to effect hotel operations, performance, net unit development and more this year.

Total wages, salaries and benefits paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is predicted to climb to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, rising labor expenses position an obstacle to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an outright concern." Increasing labor costs have been a difficulty for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in total operating earnings, according to AHLA. In current years, thousands of union hotel employees have gone on strike demanding greater incomes in order to stay up to date with the rising expense of living in locations such as California, Hawaii and Las Vegas.

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 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.

"Need has not kept up with this speed," she said. "We're also 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 need is falling and costs are skyrocketing, the math merely doesn't accumulate." Salaries, incomes and payroll-related expenses paid by hotels now represent more than 32% of total profits, according to AHLA.

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As more hotel visitors turn to expert system to enhance their travel experience, reserving hotels straight through large language designs (LLMs) might be next, hospitality experts said. Agentic commerce a process by which self-governing AI agents act on behalf of a consumer to find, compare and complete purchases is a pattern that has accelerated throughout industries like retail.

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According to PwC's 2025 Holiday 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 stay competitive with direct reservation, larger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and alter the method the consumer searches," Kletzel stated.

"If you are not visible in an LLM search result which numerous brands aren't, and this is the huge panic that they're all going through today 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 informed Hotel Dive that hospitality gamers require to guarantee their home info is being indexed by LLMs to appear in tourist queries.