Expert Methods to Increase Brand Presence via Expansion

Listen to the article 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad economic unpredictability that suppressed growth for hotels, hospitality industry leaders are looking towards 2026 with mindful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier segments might struggle amidst a growing wealth bifurcation.

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

Overall wages, incomes and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, increasing 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 expenses have been an obstacle for hoteliers for several years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor expenses have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% development in overall operating profits, according to AHLA. In the last few years, countless union hotel workers have gone on strike requiring greater earnings in order to keep up with the increasing cost 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 noted, union negotiations will be "front and center" in New york city City, where the New York City Hotel and Video gaming Trades Council's union contract with the Hotel Association of New York City is set to end in July.

In 2015, the union backed New York City's recently chosen Mayor Zorhan Mamdani, who worked on a pledge to raise New York City's base pay to $30 per hour by 2030. Hotel industry associations, including AHLA, have actually denounced similar legislation across the nation, including the recently passed $30 wage regulation in Los Angeles. "Need has actually not stayed up to date with this rate," she said. "We're also seeing these challenges intensified by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City City Safe Hotels Act. When demand is falling and expenses are soaring, the mathematics simply does not build up." Incomes, salaries and payroll-related expenditures paid by hotels now account for more than 32% of total earnings, according to AHLA.

Comparing Leading Franchise Models for 2026

As more hotel guests turn to expert system to boost their travel experience, reserving hotels straight through big language designs (LLMs) may be next, hospitality specialists said. Agentic commerce a procedure by which autonomous AI representatives act on behalf of a consumer to discover, compare and finish purchases is a pattern that has sped up throughout 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 suggestions. A smaller percentage (57%) said they 'd be most 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 searching [by means of LLMs] for services and products in travel has actually swollen in the last 12 months and is accelerating every day," Kletzel said, adding that inevitably, hotels will "take a tough look at how they can enable commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they already have if they do an excellent task with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand sites and mobile apps, and change the method the customer searches," Kletzel said.

"If you are not visible in an LLM search results page 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 informed Hotel Dive that hospitality players need to guarantee their residential or commercial property details is being indexed by LLMs to appear in traveler inquiries.