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Listen to the short article 17 minutes This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad economic unpredictability that stifled growth for hotels, hospitality industry leaders are looking towards 2026 with careful optimism. Increasing operational costs are slated to challenge owners this year and lower-tier sectors could have a hard time in the middle of a growing wealth bifurcation.

And through everything, hotel companies are anticipated to strengthen their portfolios with brand-new brand offerings and partnerships. 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 expected to impact hotel operations, efficiency, net unit 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, shared with Hotel Dive. In 2026, that figure is projected to reach $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, rising labor costs position an obstacle to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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Rising labor expenses have been a difficulty for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, surpassing the 12.8% development in overall operating profits, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan through Getty Images In 2026, Davis kept in mind, union negotiations will be "front and center" in New York City, where the New York City Hotel and Video gaming Trades Council's union agreement with the Hotel Association of New York City is set to end in July.

In 2015, the union backed New York City's newly chosen Mayor Zorhan Mamdani, who operated on a promise to raise New york city City's base pay to $30 per hour by 2030. Hotel market associations, including AHLA, have actually denounced comparable legislation throughout the country, including the just recently passed $30 wage ordinance in Los Angeles. "Demand has actually not kept up with this speed," she said. Salaries, salaries and payroll-related costs paid by hotels now account for more than 32% of total earnings, according to AHLA.

Targeting Profitable Business Investments in 2026

As more hotel visitors turn to artificial intelligence to improve their travel experience, scheduling hotels directly through large language designs (LLMs) may be next, hospitality experts said. Agentic commerce a process by which self-governing AI agents act on behalf of a consumer to find, compare and complete purchases is a trend that has actually accelerated across industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're likely to utilize AI for travel recommendations. A smaller portion (57%) said they 'd be likely to use it for reserving travel. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The variety of customers that are browsing [via LLMs] for services and products in travel has ballooned in the last 12 months and is accelerating every day," Kletzel said, including that inevitably, hotels will "take a difficult take a look at how they can allow commerce and deals through agentic [AI]"" [Brands] can construct on the trust they currently have if they do a great 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 reservation, bigger multibrand hotel business will "embed LLMs into their own brand name sites and mobile apps, and change the way the consumer searches," Kletzel stated.

"If you are not discoverable in an LLM search results page which many brands aren't, and this is the big panic that they're all going through right now consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, similarly told Hotel Dive that hospitality players need to ensure their home details is being indexed by LLMs to appear in tourist questions.