Evaluating Top Franchise Models for Growth

, hospitality market leaders are looking toward 2026 with careful optimism. Rising operational expenses are slated to challenge owners this year and lower-tier sections could struggle amidst a growing wealth bifurcation.

And through all of it, hotel business are anticipated to fortify their portfolios with brand-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 patterns anticipated to impact hotel operations, efficiency, net system growth and more this year.

Total salaries, incomes and advantages paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, rising labor expenses posture a challenge to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

Strategic Tips for Hospitality Brand Expansion

Increasing labor costs have actually been a challenge for hoteliers for years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in total operating revenue, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan by means of Getty Images In 2026, Davis noted, union settlements 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.

In 2015, the union backed New york city City's recently chosen Mayor Zorhan Mamdani, who worked on a guarantee to raise New York City's minimum wage to $30 per hour by 2030. Hotel industry associations, including AHLA, have denounced comparable legislation throughout the country, consisting of the just recently passed $30 wage regulation in Los Angeles. "Demand has not kept up with this rate," she said. "We're also seeing these challenges 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 costs are soaring, the math simply doesn't add up." Incomes, salaries and payroll-related expenses paid by hotels now account for more than 32% of overall earnings, according to AHLA.

Why Fast Casual Market Value Will Be Rising

As more hotel guests turn to artificial intelligence to improve their travel experience, reserving hotels straight through big language models (LLMs) may be next, hospitality experts said. Agentic commerce a process by which self-governing AI agents act on behalf of a consumer to find, compare and finish purchases is a pattern that has sped up throughout industries like retail.

Freddy's Frozen Custard & Steakburgers

According to PwC's 2025 Vacation Outlook report, 76% of millennials said 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 product marketing at Talkdesk To remain competitive with direct reservation, bigger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and alter the method the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search engine 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 customer experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers require to guarantee their residential or commercial property info is being indexed by LLMs to appear in traveler questions.