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, hospitality industry leaders are looking towards 2026 with mindful optimism. Rising operational costs are slated to challenge owners this year and lower-tier segments could struggle amid a growing wealth bifurcation.

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

Overall incomes, wages and benefits paid by U.S. hotels increased 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 expenses present a challenge to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute concern." Increasing labor costs have actually been an obstacle for hoteliers for several years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% development in total operating income, according to AHLA. In recent years, countless union hotel employees have actually gone on strike demanding higher earnings in order to keep up with the rising cost of living in places such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan by means of 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 Video gaming Trades Council's union agreement with the Hotel Association of New York City City is set to expire in July.

"Demand has not kept up with this speed," she said. Salaries, earnings and payroll-related expenditures paid by hotels now account for more than 32% of total profits, according to AHLA.

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As more hotel visitors turn to expert system to improve their travel experience, reserving hotels straight through large language designs (LLMs) may be next, hospitality experts stated. Agentic commerce a procedure by which self-governing AI representatives act on behalf of a customer to discover, compare and finish purchases is a trend 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 utilize AI for travel recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct reservation, bigger multibrand hotel business will "embed LLMs into their own brand name websites and mobile apps, and change the way the customer searches," Kletzel said.

"If you are not visible in an LLM search results page which numerous brands 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 customer experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers require to guarantee their property information is being indexed by LLMs to appear in tourist queries.