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Listen to the post 17 min This audio is auto-generated. Please let us know if you have feedback. Following a year of broad economic unpredictability that stifled growth for hotels, hospitality industry leaders are looking towards 2026 with cautious optimism. Rising operational costs are slated to challenge owners this year and lower-tier sections could struggle amidst a growing wealth bifurcation.

And through everything, hotel business are expected to fortify their portfolios with new brand name offerings and collaborations. As the year gets underway, Hotel Dive talked with hospitality leaders from differing corners of the market about their 2026 forecasts. Below are the leading trends anticipated to effect hotel operations, performance, net system growth and more this year.

Overall salaries, wages and benefits 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 predicted to reach $131 billion, representing an approximately 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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"It is an outright issue." Rising labor expenses have actually been a difficulty for hoteliers for several years, Davis stated, especially following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, exceeding the 12.8% development in total operating income, according to AHLA. In current years, thousands of union hotel workers have actually gone on strike requiring higher salaries in order to stay up to date with the rising expense of living in places such as California, Hawaii and Las Vegas.

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

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

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As more hotel guests turn to synthetic intelligence to improve their travel experience, reserving hotels straight through big language designs (LLMs) may be next, hospitality specialists stated. Agentic commerce a procedure by which self-governing AI agents act upon behalf of a consumer to find, compare and finish purchases is a trend that has sped up throughout markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're likely to use AI for travel suggestions. A smaller sized percentage (57%) said they 'd be likely to use it for reserving travel. But that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of customers that are browsing [by means of LLMs] for product or services in travel has ballooned in the last 12 months and is speeding up every day," Kletzel said, including that inevitably, hotels will "take a hard take a look at how they can allow commerce and transactions through agentic [AI]"" [Brands] can build on the trust they already have if they do a terrific task with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct booking, bigger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and alter the method the customer searches," Kletzel stated.

"If you are not discoverable in an LLM search results page which many brand names aren't, and this is the huge 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 customer experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to ensure their property information is being indexed by LLMs to appear in traveler questions.