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Listen to the article 17 minutes This audio is auto-generated. Please let us know if you have feedback. Following a year of broad economic unpredictability that suppressed growth for hotels, hospitality market leaders are looking towards 2026 with mindful optimism. Increasing operational costs are slated to challenge owners this year and lower-tier segments could struggle in the middle of a growing wealth bifurcation.

And through it all, hotel companies are anticipated to strengthen their portfolios with new brand offerings and partnerships. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying corners of the industry about their 2026 forecasts. Below are the leading trends anticipated to impact hotel operations, performance, net system development and more this year.

Overall wages, salaries and benefits paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is projected to reach $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor costs present an obstacle to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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

3, 2024 in San Francisco, California. Justin Sullivan via 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 agreement with the Hotel Association of New York City is set to expire in July.

Last year, the union backed New York City's freshly elected Mayor Zorhan Mamdani, who operated on a guarantee to raise New york city City's minimum wage to $30 per hour by 2030. Hotel market associations, consisting of AHLA, have denounced similar legislation across the nation, consisting of the just recently passed $30 wage ordinance in Los Angeles. "Need has actually not kept up with this pace," she stated. "We're likewise seeing these difficulties intensified by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City City Safe Hotels Act. When demand is falling and costs are skyrocketing, the math merely doesn't accumulate." Wages, salaries and payroll-related expenditures paid by hotels now account for more than 32% of total revenue, according to AHLA.

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As more hotel visitors turn to artificial intelligence to boost their travel experience, booking hotels straight through big language designs (LLMs) may be next, hospitality specialists stated. Agentic commerce a procedure by which autonomous AI representatives act upon behalf of a customer to discover, compare and complete purchases is a pattern 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 utilize 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 stay competitive with direct booking, larger multibrand hotel companies will "embed LLMs into their own brand name sites and mobile apps, and alter the way the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search result which lots of brands aren't, and this is the big panic that they're all going through today consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality product marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers need to ensure their property info is being indexed by LLMs to appear in tourist queries.