Identifying Profitable Hospitality Ventures in 2026

Listen to the short article 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad economic uncertainty that stifled development for hotels, hospitality market leaders are looking toward 2026 with mindful optimism. Rising operational expenses are slated to challenge owners this year and lower-tier sectors could have a hard time in the middle of a growing wealth bifurcation.

And through it all, hotel business are expected to fortify their portfolios with new brand offerings and collaborations. As the year gets underway, Hotel Dive talked to hospitality leaders from varying corners of the market about their 2026 forecasts. Below are the top patterns expected to impact hotel operations, efficiency, net unit growth and more this year.

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

Why Hospitality Market Value Will Be Surging

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

3, 2024 in San Francisco, California. Justin Sullivan through Getty Images In 2026, Davis kept in mind, union negotiations will be "front and center" in New York City, where the New York City Hotel and Video gaming Trades Council's union agreement with the Hotel Association of New York City is set to expire 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, consisting of AHLA, have denounced comparable legislation across the country, consisting of the recently passed $30 wage regulation in Los Angeles. "Need has not kept up with this speed," she stated. "We're also 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 expenses are skyrocketing, the mathematics simply does not accumulate." Incomes, wages and payroll-related expenditures paid by hotels now account for more than 32% of total earnings, according to AHLA.

Evaluating Top Franchise Schemes for Growth

As more hotel visitors turn to expert system to boost their travel experience, scheduling hotels straight through big language models (LLMs) may be next, hospitality specialists stated. Agentic commerce a process by which autonomous AI representatives act upon behalf of a customer to discover, compare and finish purchases is a pattern 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. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct reservation, bigger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and change the way the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result which many brands aren't, and this is the big panic that they're all going through right now customers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality product marketing at AI customer experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers need to guarantee their home information is being indexed by LLMs to appear in tourist queries.