Analyzing Fast Casual Sector Growth Data for 2026

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

And through everything, hotel companies are anticipated to strengthen their portfolios with new brand offerings and partnerships. As the year gets underway, Hotel Dive talked with hospitality leaders from varying corners of the market about their 2026 predictions. Below are the top trends expected to impact hotel operations, performance, net system growth and more this year.

Overall incomes, wages and advantages paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is forecasted to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, rising labor costs position an obstacle to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis noted, union negotiations will be "front and center" in New york city City, where the New York Hotel and Video 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 City's newly chosen Mayor Zorhan Mamdani, who worked on a pledge to raise New york city City's base pay to $30 per hour by 2030. Hotel market associations, including AHLA, have knocked comparable legislation across the nation, consisting of the recently passed $30 wage regulation in Los Angeles. "Demand has not kept up with this pace," she said. Incomes, wages and payroll-related expenses paid by hotels now account for more than 32% of overall revenue, according to AHLA.

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As more hotel visitors turn to expert system to boost their travel experience, scheduling hotels straight through big language models (LLMs) may be next, hospitality experts stated. Agentic commerce a process by which autonomous AI representatives act on behalf of a customer to discover, compare and finish purchases is a trend that has accelerated across markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're most likely to utilize AI for travel suggestions. A smaller sized percentage (57%) stated they 'd be most likely to utilize it for booking travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of consumers that are searching [by means of LLMs] for services and products in travel has swollen in the last 12 months and is speeding up every day," Kletzel stated, adding that undoubtedly, hotels will "take a tough appearance at how they can enable commerce and deals through agentic [AI]"" [Brands] can construct on the trust they currently have if they do a terrific job with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct booking, larger multibrand hotel business 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 discoverable in an LLM search results page which lots of brand names aren't, and this is the big panic that they're all going through today customers 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 told Hotel Dive that hospitality players need to guarantee their property information is being indexed by LLMs to appear in traveler inquiries.