Why Hospitality Brand Share Is Surging

Listen to the article 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad financial unpredictability that stifled development for hotels, hospitality market leaders are looking towards 2026 with cautious optimism. Increasing operational costs are slated to challenge owners this year and lower-tier segments could have a hard time amid a growing wealth bifurcation.

And through everything, hotel business are anticipated to strengthen their portfolios with 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 predictions. Below are the leading trends anticipated to impact hotel operations, efficiency, net unit growth and more this year.

Total wages, earnings and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data 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 pose a difficulty to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute issue." Rising labor expenses have been an obstacle for hoteliers for many years, Davis said, particularly following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in total operating profits, according to AHLA. In current years, countless union hotel employees have gone on strike requiring higher wages in order to keep up with the increasing expense of living in locations such as California, Hawaii and Las Vegas.

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

Last year, the union backed New York City's freshly chosen Mayor Zorhan Mamdani, who operated on a promise to raise New york city City's base pay to $30 per hour by 2030. Hotel industry associations, including AHLA, have knocked comparable legislation throughout the country, including the recently passed $30 wage regulation in Los Angeles. "Demand has not kept up with this rate," she said. Incomes, incomes and payroll-related expenditures paid by hotels now account for more than 32% of overall revenue, according to AHLA.

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As more hotel guests turn to artificial intelligence to improve their travel experience, booking hotels straight through large language designs (LLMs) may be next, hospitality professionals said. Agentic commerce a process by which autonomous AI agents act upon behalf of a customer to find, compare and complete purchases is a trend that has actually accelerated across markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're most likely to use AI for travel recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct booking, larger multibrand hotel business will "embed LLMs into their own brand name websites and mobile apps, and alter the way the consumer searches," Kletzel stated.

"If you are not discoverable in an LLM search result which many brands aren't, and this is the big panic that they're all going through right now consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI customer experience platform Talkdesk, likewise informed Hotel Dive that hospitality players need to ensure their home information is being indexed by LLMs to appear in traveler inquiries.