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Listen to the article 17 minutes This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad economic unpredictability that suppressed development for hotels, hospitality industry leaders are looking toward 2026 with cautious optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier sectors could struggle in the middle of a growing wealth bifurcation.

And through it all, hotel companies are anticipated to fortify their portfolios with new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from differing corners of the industry about their 2026 predictions. Below are the top patterns expected to effect hotel operations, efficiency, net unit development and more this year.

Overall incomes, wages 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 forecasted to reach $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, increasing labor costs position an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute issue." Increasing labor costs have actually been an obstacle for hoteliers for several years, Davis said, especially following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, exceeding the 12.8% development in overall operating income, according to AHLA. Over the last few years, thousands of union hotel employees have actually gone on strike requiring higher wages in order to keep up with the rising 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 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 City is set to expire in July.

Last year, the union backed New york city City's freshly chosen Mayor Zorhan Mamdani, who ran on a guarantee to raise New York City's base pay to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have knocked similar legislation throughout the nation, consisting of the just recently passed $30 wage ordinance in Los Angeles. "Need has not kept up with this rate," she stated. Incomes, incomes and payroll-related expenditures paid by hotels now account for more than 32% of overall earnings, according to AHLA.

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As more hotel guests turn to artificial intelligence to boost their travel experience, booking hotels straight through large language models (LLMs) might be next, hospitality professionals said. Agentic commerce a process by which autonomous AI representatives act on behalf of a consumer to find, compare and finish purchases is a trend that has actually accelerated throughout markets like retail.

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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, transportation and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand name sites and mobile apps, and alter the method the customer searches," Kletzel said.

"If you are not discoverable in an LLM search results page which numerous brands aren't, and this is the big panic that they're all going through today customers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality product marketing at AI consumer experience platform Talkdesk, similarly informed Hotel Dive that hospitality gamers need to ensure their home info is being indexed by LLMs to appear in traveler queries.