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Listen to the short article 17 minutes This audio is auto-generated. Please let us know if you have feedback. Following a year of broad financial unpredictability that suppressed development for hotels, hospitality market leaders are looking toward 2026 with mindful 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 companies are expected to strengthen their portfolios with brand-new brand offerings and partnerships. As the year gets underway, Hotel Dive talked to hospitality leaders from differing corners of the industry about their 2026 forecasts. Below are the leading patterns expected to impact hotel operations, efficiency, net unit growth and more this year.

Total salaries, earnings and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Accommodations 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, rising labor expenses pose a challenge 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 costs 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, surpassing the 12.8% development in overall operating income, according to AHLA. Recently, thousands of union hotel workers have actually gone on strike requiring higher incomes in order to stay up to date with the rising cost of living in locations such as California, Hawaii and Las Vegas.

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 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 expire in July.

"Demand has actually not kept up with this rate," she said. Incomes, earnings and payroll-related costs paid by hotels now account for more than 32% of overall earnings, according to AHLA.

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As more hotel guests turn to expert system to boost their travel experience, scheduling hotels directly through large language models (LLMs) might be next, hospitality professionals stated. Agentic commerce a procedure by which self-governing AI representatives act upon behalf of a customer to discover, compare and finish purchases is a trend that has accelerated throughout industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're 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 product marketing at Talkdesk To remain competitive with direct reservation, bigger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and alter the method the consumer searches," Kletzel said.

"If you are not visible in an LLM search results page 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 item marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality players need to ensure their residential or commercial property info is being indexed by LLMs to appear in tourist queries.