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, hospitality market leaders are looking towards 2026 with cautious optimism. Increasing operational costs are slated to challenge owners this year and lower-tier sections might struggle amidst a growing wealth bifurcation.

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

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

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

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis kept in mind, union settlements will be "front and center" in New York 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 expire in July.

In 2015, the union backed New York City's recently elected Mayor Zorhan Mamdani, who worked on a promise to raise New York City's minimum wage to $30 per hour by 2030. Hotel market associations, consisting of AHLA, have actually denounced comparable legislation across the country, consisting of the recently passed $30 wage regulation in Los Angeles. "Need has not kept up with this pace," she stated. "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 expenses are skyrocketing, the mathematics merely does not build up." Salaries, wages and payroll-related expenditures paid by hotels now account for more than 32% of overall income, according to AHLA.

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As more hotel visitors turn to expert system to boost their travel experience, booking hotels directly through large language models (LLMs) might be next, hospitality specialists said. Agentic commerce a process by which autonomous AI agents act on behalf of a consumer to discover, 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 Vacation Outlook report, 76% of millennials said they're likely to utilize AI for travel recommendations. A smaller portion (57%) said they 'd be likely to use it for scheduling travel. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The number of consumers that are browsing [through LLMs] for products and services in travel has actually swollen in the last 12 months and is speeding up every day," Kletzel said, including that undoubtedly, hotels will "take a difficult take a look at how they can enable commerce and deals through agentic [AI]"" [Brands] can construct on the trust they currently have if they do an excellent task with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct booking, bigger multibrand hotel companies will "embed LLMs into their own brand name sites and mobile apps, and alter the way the consumer searches," Kletzel said.

"If you are not visible in an LLM search result which many brands aren't, and this is the huge panic that they're all going through today consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality product marketing at AI consumer experience platform Talkdesk, similarly informed Hotel Dive that hospitality players require to guarantee their home details is being indexed by LLMs to appear in traveler inquiries.