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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 sectors could struggle in the middle of a growing wealth bifurcation.

And through all of it, hotel companies are expected to strengthen their portfolios with new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke to hospitality leaders from differing corners of the market about their 2026 predictions. Below are the leading trends expected to impact hotel operations, efficiency, net system development and more this year.

Overall incomes, incomes and benefits paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is forecasted to climb to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, rising labor expenses position an obstacle to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright issue." Rising labor expenses have been a challenge for hoteliers for years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% development in overall operating revenue, according to AHLA. Recently, countless union hotel workers have gone on strike requiring higher earnings in order to stay up to date with the increasing expense of living in locations such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis noted, 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 expire in July.

In 2015, the union backed New York City's newly chosen Mayor Zorhan Mamdani, who worked on a pledge to raise New york city City's minimum wage to $30 per hour by 2030. Hotel market associations, including AHLA, have knocked similar legislation throughout the nation, consisting of the just recently passed $30 wage regulation in Los Angeles. "Need has actually not kept up with this rate," she stated. Incomes, incomes and payroll-related expenditures paid by hotels now account for more than 32% of total revenue, according to AHLA.

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As more hotel guests turn to expert system to enhance their travel experience, scheduling hotels straight through large language designs (LLMs) might be next, hospitality professionals stated. Agentic commerce a process by which self-governing AI agents act upon behalf of a consumer to discover, compare and complete purchases is a trend that has actually sped up throughout industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're most likely to use AI for travel suggestions. A smaller sized portion (57%) stated they 'd be likely to utilize it for booking travel. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The number of customers that are browsing [through LLMs] for items 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 hard take a look at how they can allow commerce and transactions through agentic [AI]"" [Brands] can develop on the trust they already have if they do a terrific job with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct booking, bigger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and change the method the customer searches," Kletzel stated.

"If you are not visible in an LLM search engine result which many brands aren't, and this is the big 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 item marketing at AI client experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to ensure their residential or commercial property information is being indexed by LLMs to appear in tourist inquiries.