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Listen to the article 17 min This audio is auto-generated. Please let us know if you have feedback. Following a year of broad economic uncertainty that suppressed growth for hotels, hospitality market leaders are looking toward 2026 with careful optimism. Rising operational costs are slated to challenge owners this year and lower-tier sections might have a hard time in the middle of a growing wealth bifurcation.

And through it all, hotel business are expected to fortify their portfolios with brand-new brand offerings and collaborations. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying corners of the market about their 2026 predictions. Below are the top trends anticipated to impact hotel operations, efficiency, net unit growth and more this year.

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

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Increasing labor costs have been an obstacle for hoteliers for years, Davis said, especially following the COVID-19 pandemic. In general, hotel labor expenses have increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in overall operating revenue, according to AHLA.

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

Last year, the union backed New york city City's recently elected Mayor Zorhan Mamdani, who operated on a pledge to raise New york city City's base pay to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have actually knocked similar legislation throughout the country, consisting of the recently passed $30 wage ordinance in Los Angeles. "Demand has not kept up with this rate," she stated. Salaries, salaries and payroll-related expenses paid by hotels now account for more than 32% of total revenue, according to AHLA.

Major Regional Shifts in Brand Development

As more hotel guests turn to artificial intelligence to boost their travel experience, reserving hotels directly through big language designs (LLMs) might be next, hospitality experts stated. Agentic commerce a procedure by which autonomous AI agents act on behalf of a consumer to discover, compare and complete purchases is a trend that has actually accelerated across industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're most likely to utilize AI for travel recommendations. A smaller sized percentage (57%) stated they 'd be likely to utilize it for booking travel. But that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. "The number of customers that are searching [via LLMs] for services and products in travel has swollen in the last 12 months and is speeding up every day," Kletzel stated, adding that undoubtedly, hotels will "take a hard take a look at how they can make it possible for commerce and deals through agentic [AI]"" [Brands] can develop on the trust they already have if they do a fantastic task with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, larger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and change the way the consumer searches," Kletzel stated.

"If you are not discoverable in an LLM search results page which many 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 customer experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to guarantee their home information is being indexed by LLMs to appear in tourist queries.