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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 unpredictability that stifled growth for hotels, hospitality industry leaders are looking toward 2026 with mindful optimism. Increasing operational costs are slated to challenge owners this year and lower-tier sectors might struggle amidst 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 talked with hospitality leaders from varying corners of the market about their 2026 forecasts. Below are the leading trends anticipated to impact hotel operations, efficiency, net unit development and more this year.

Total wages, incomes and advantages paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is forecasted to climb up to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, increasing labor costs present an obstacle to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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

3, 2024 in San Francisco, California. Justin Sullivan through Getty Images In 2026, Davis kept in mind, 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 end in July.

"Need has not kept up with this speed," she said. "We're also seeing these challenges compounded by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City City Safe Hotels Act. When need is falling and costs are skyrocketing, the math simply doesn't build up." Incomes, earnings and payroll-related expenditures paid by hotels now represent more than 32% of total income, according to AHLA.

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As more hotel guests turn to expert system to improve their travel experience, booking hotels directly through big language designs (LLMs) may be next, hospitality experts stated. Agentic commerce a process by which autonomous AI agents act upon behalf of a customer to discover, compare and complete purchases is a pattern that has actually accelerated throughout markets like retail.

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According to PwC's 2025 Vacation 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, informed 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 sites and mobile apps, and change the method the customer searches," Kletzel said.

"If you are not visible in an LLM search results page which numerous brand names aren't, and this is the huge panic that they're all going through right now customers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI client experience platform Talkdesk, likewise informed Hotel Dive that hospitality gamers require to ensure their residential or commercial property details is being indexed by LLMs to appear in tourist queries.