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, hospitality industry leaders are looking toward 2026 with cautious optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier sections might struggle in the middle of a growing wealth bifurcation.

And through all of it, hotel companies are expected to fortify their portfolios with new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke to hospitality leaders from differing corners of the market about their 2026 predictions. Below are the top patterns expected to impact hotel operations, performance, net system development and more this year.

Overall incomes, incomes 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 projected to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, increasing labor expenses position an obstacle to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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Increasing labor costs have actually been a difficulty for hoteliers for years, Davis said, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% development in total operating income, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis noted, union settlements will be "front and center" in New York City, where the New York Hotel and Video gaming Trades Council's union agreement with the Hotel Association of New York City is set to expire in July.

"Demand has not stayed up to date with this rate," she stated. "We're likewise seeing these obstacles intensified by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City Safe Hotels Act. When demand is falling and costs are soaring, the mathematics simply does not accumulate." Wages, wages 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 expert system to enhance their travel experience, scheduling hotels directly through large language models (LLMs) might be next, hospitality specialists stated. Agentic commerce a procedure by which self-governing AI representatives act upon behalf of a consumer to find, compare and finish purchases is a trend that has sped up across industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're likely to utilize AI for travel suggestions. A smaller sized portion (57%) stated they 'd be most likely to utilize it for scheduling travel. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The number of consumers that are browsing [via LLMs] for product or services in travel has swollen in the last 12 months and is accelerating every day," Kletzel stated, including that undoubtedly, hotels will "take a difficult take a look at how they can allow commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they currently have if they do an excellent task with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand name websites and mobile apps, and alter the way the customer searches," Kletzel said.

"If you are not discoverable in an LLM search results page which lots of brands 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 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 traveler queries.