Targeting High-ROI Business Investments in 2026

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

And through it all, hotel companies are expected to fortify their portfolios with new brand name offerings and collaborations. As the year gets underway, Hotel Dive consulted with hospitality leaders from varying corners of the market about their 2026 forecasts. Below are the top trends anticipated to effect hotel operations, efficiency, net system growth and more this year.

Overall incomes, wages and advantages 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 predicted to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, rising labor expenses posture a difficulty to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an absolute concern." Rising labor costs have actually been an obstacle for hoteliers for many years, Davis said, particularly following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, outmatching the 12.8% development in overall operating profits, according to AHLA. In recent years, countless union hotel workers have actually gone on strike requiring higher earnings in order to stay up to date with the increasing 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, where the New York Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City City is set to end in July.

Last year, the union backed New York City's newly elected Mayor Zorhan Mamdani, who ran 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 similar legislation throughout the nation, consisting of the recently passed $30 wage regulation in Los Angeles. "Demand has actually not stayed up to date with this pace," she stated. "We're likewise seeing these obstacles intensified 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 costs are skyrocketing, the mathematics merely does not accumulate." Incomes, incomes and payroll-related expenditures paid by hotels now represent more than 32% of total revenue, according to AHLA.

Can Fast Casual Franchises Remain Profitable in 2026?

As more hotel visitors turn to artificial intelligence to improve their travel experience, reserving hotels directly through big language models (LLMs) may be next, hospitality professionals stated. Agentic commerce a process by which self-governing AI agents act upon behalf of a consumer to find, compare and finish purchases is a trend that has actually 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 utilize AI for travel suggestions. A smaller sized portion (57%) said they 'd be likely to use it for scheduling travel. But that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. "The variety of customers that are searching [via LLMs] for product or services in travel has actually 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 enable commerce and deals through agentic [AI]"" [Brands] can build on the trust they currently have if they do a fantastic job with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct booking, bigger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and change the way the customer searches," Kletzel said.

"If you are not discoverable in an LLM search result which lots of brand names aren't, and this is the big panic that they're all going through today customers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, similarly informed Hotel Dive that hospitality gamers require to guarantee their home info is being indexed by LLMs to appear in tourist queries.