The Outlook of 2026 Brand Expansion Strategies

, hospitality industry leaders are looking toward 2026 with cautious optimism. Increasing operational costs are slated to challenge owners this year and lower-tier sectors could have a hard time amid a growing wealth bifurcation.

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

Overall incomes, earnings 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 reach $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, rising labor costs present a difficulty to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright concern." Increasing labor costs have been a difficulty for hoteliers for several years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, outpacing the 12.8% development in total operating income, according to AHLA. In recent years, thousands of union hotel workers have gone on strike requiring greater incomes in order to keep up 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 negotiations will be "front and center" in New York 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 end in July.

"Need has actually not kept up with this pace," she said. "We're likewise seeing these obstacles compounded by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City Safe Hotels Act. When need is falling and expenses are skyrocketing, the mathematics just does not build up." Salaries, salaries and payroll-related costs paid by hotels now represent more than 32% of overall earnings, according to AHLA.

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As more hotel guests turn to synthetic intelligence to improve their travel experience, reserving hotels directly through big language designs (LLMs) may be next, hospitality specialists stated. Agentic commerce a process by which autonomous AI representatives act on behalf of a consumer to find, compare and finish purchases is a pattern that has accelerated across markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're likely to use AI for travel suggestions. A smaller sized percentage (57%) said they 'd be most likely to use it for reserving travel. But that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The variety of customers that are browsing [by means of LLMs] for product or services in travel has actually ballooned in the last 12 months and is accelerating every day," Kletzel stated, including that inevitably, hotels will "take a hard take a look at how they can allow commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they already have if they do a terrific job with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct booking, larger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and change the method the customer searches," Kletzel said.

"If you are not discoverable in an LLM search result which many brands aren't, and this is the huge 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 item marketing at AI client experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers need to guarantee their home information is being indexed by LLMs to appear in tourist queries.