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, hospitality market leaders are looking towards 2026 with careful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier sections could struggle amid a growing wealth bifurcation.

And through everything, hotel companies are anticipated to strengthen their portfolios with new brand offerings and collaborations. As the year gets underway, Hotel Dive consulted with hospitality leaders from varying corners of the industry about their 2026 predictions. Below are the leading trends anticipated to impact hotel operations, efficiency, net unit growth and more this year.

Total wages, salaries and benefits paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is predicted to climb to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, increasing labor costs position an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an absolute issue." Rising labor expenses have actually been a challenge for hoteliers for many years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in total operating profits, according to AHLA. In current years, countless union hotel workers have gone on strike requiring greater earnings in order to stay up to date with the increasing expense of living in places such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis kept in mind, 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 City is set to end in July.

In 2015, the union backed New york city City's newly elected Mayor Zorhan Mamdani, who operated on a guarantee to raise New york city City's minimum wage to $30 per hour by 2030. Hotel market associations, consisting of AHLA, have actually knocked comparable legislation across the country, including the recently passed $30 wage regulation in Los Angeles. "Need has not stayed up to date with this speed," she said. "We're likewise seeing these obstacles 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 costs are skyrocketing, the mathematics merely does not build up." 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 visitors turn to expert system to enhance their travel experience, scheduling hotels straight through big language models (LLMs) might be next, hospitality specialists 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 pattern that has accelerated throughout markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're likely to use AI for travel recommendations. A smaller sized percentage (57%) stated they 'd be most likely to use it for booking travel. But that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. "The variety of customers that are browsing [through LLMs] for services and products in travel has actually swollen in the last 12 months and is speeding up every day," Kletzel said, adding that inevitably, hotels will "take a tough look at how they can make it possible for commerce and transactions through agentic [AI]"" [Brands] can build on the trust they currently have if they do a great task 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, larger multibrand hotel business will "embed LLMs into their own brand name websites and mobile apps, and change the method the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search result which lots of brands aren't, and this is the big panic that they're all going through today consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI client experience platform Talkdesk, similarly informed Hotel Dive that hospitality gamers need to ensure their residential or commercial property information is being indexed by LLMs to appear in tourist questions.