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, hospitality market leaders are looking toward 2026 with careful optimism. Rising operational expenses are slated to challenge owners this year and lower-tier sections could have a hard time in the middle of a growing wealth bifurcation.

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

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

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Rising labor costs have been a challenge for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor expenses have increased 15.3% from 2019 to 2025, outmatching the 12.8% development in total operating profits, according to AHLA.

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, where the New York City Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City City is set to end in July.

"Demand has not kept up with this speed," she stated. "We're likewise 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 demand is falling and expenses are skyrocketing, the math merely doesn't include up." Wages, incomes and payroll-related expenses paid by hotels now account for more than 32% of total earnings, according to AHLA.

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As more hotel visitors turn to synthetic intelligence to enhance their travel experience, reserving hotels straight through big language models (LLMs) may be next, hospitality professionals said. Agentic commerce a procedure by which self-governing AI representatives act upon behalf of a consumer to find, compare and finish 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 portion (57%) said they 'd be most 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 [by means of LLMs] for product or services in travel has swollen in the last 12 months and is accelerating every day," Kletzel stated, adding that undoubtedly, hotels will "take a difficult look at how they can allow commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they currently have if they do a fantastic task with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct reservation, bigger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and alter the method the customer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result which many brand names aren't, and this is the huge 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 customer experience platform Talkdesk, similarly told Hotel Dive that hospitality players need to ensure their property info is being indexed by LLMs to appear in traveler questions.