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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 economic uncertainty that stifled growth for hotels, hospitality industry leaders are looking towards 2026 with mindful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier segments might have a hard time in the middle of a growing wealth bifurcation.

And through everything, hotel business are anticipated to fortify their portfolios with brand-new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from varying corners of the market about their 2026 forecasts. Below are the leading patterns expected to impact hotel operations, efficiency, net system development and more this year.

Total wages, incomes and benefits paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, increasing labor expenses position a difficulty to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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Rising labor expenses have been a difficulty for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in total operating revenue, 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 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.

In 2015, the union backed New york city City's newly elected Mayor Zorhan Mamdani, who ran 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 knocked comparable legislation across the country, including the recently passed $30 wage regulation in Los Angeles. "Need has not stayed up to date with this speed," she stated. "We're likewise seeing these obstacles compounded by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City City Safe Hotels Act. When demand is falling and expenses are skyrocketing, the math merely doesn't accumulate." Wages, earnings and payroll-related expenses paid by hotels now represent more than 32% of overall profits, according to AHLA.

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As more hotel guests turn to synthetic intelligence to boost their travel experience, booking hotels straight through large language designs (LLMs) might be next, hospitality experts said. Agentic commerce a process by which self-governing AI representatives act upon behalf of a consumer to discover, compare and finish purchases is a trend that has sped up throughout industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're likely to utilize AI for travel suggestions. A smaller sized percentage (57%) said they 'd be likely to utilize it for booking travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The variety of consumers that are browsing [through LLMs] for services and products in travel has actually swollen in the last 12 months and is accelerating every day," Kletzel said, adding that undoubtedly, hotels will "take a tough look at how they can allow commerce and deals through agentic [AI]"" [Brands] can develop on the trust they currently have if they do a fantastic job with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct reservation, bigger multibrand hotel business will "embed LLMs into their own brand sites and mobile apps, and alter the way the customer searches," Kletzel said.

"If you are not visible in an LLM search result which many brand names aren't, and this is the huge 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 consumer experience platform Talkdesk, similarly informed Hotel Dive that hospitality players require to ensure their property info is being indexed by LLMs to appear in traveler queries.