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, hospitality industry leaders are looking toward 2026 with careful optimism. Rising functional costs are slated to challenge owners this year and lower-tier segments might have a hard time amidst a growing wealth bifurcation.

And through everything, hotel business are expected to fortify their portfolios with brand-new brand name offerings and collaborations. As the year gets underway, Hotel Dive consulted with hospitality leaders from differing corners of the industry about their 2026 predictions. Below are the leading patterns expected to effect hotel operations, performance, net system growth and more this year.

Total wages, wages 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 predicted to climb to $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, increasing labor expenses posture a challenge to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute concern." Rising labor expenses have been a difficulty for hoteliers for many years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, exceeding the 12.8% development in overall operating profits, according to AHLA. Recently, thousands of union hotel workers have gone on strike demanding higher wages in order to stay up to date with the rising cost of living in locations such as California, Hawaii and Las Vegas.

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 City Hotel and 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 City's freshly chosen Mayor Zorhan Mamdani, who worked on a promise to raise New York City's minimum wage to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have actually denounced comparable legislation across the nation, consisting of the recently passed $30 wage regulation in Los Angeles. "Need has actually not stayed up to date with this speed," she said. "We're also seeing these difficulties intensified by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City Safe Hotels Act. When need is falling and costs are skyrocketing, the math just does not build up." Incomes, wages and payroll-related costs paid by hotels now account for more than 32% of overall earnings, 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 experts stated. Agentic commerce a procedure by which self-governing AI agents act upon behalf of a customer to find, compare and complete purchases is a trend that has actually sped up across 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 suggestions. A smaller percentage (57%) said they 'd be likely to utilize it for booking travel. But that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. "The number of customers that are searching [through LLMs] for services and products in travel has swollen in the last 12 months and is speeding up every day," Kletzel said, adding that inevitably, hotels will "take a hard look at how they can enable commerce and deals through agentic [AI]"" [Brands] can construct on the trust they currently have if they do a fantastic job with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct reservation, larger multibrand hotel companies will "embed LLMs into their own brand sites and mobile apps, and alter the way the customer searches," Kletzel said.

"If you are not discoverable in an LLM search result which numerous brand names aren't, and this is the big 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 players require to ensure their home information is being indexed by LLMs to appear in traveler questions.