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

And through everything, hotel business are expected to fortify their portfolios with new brand offerings and partnerships. As the year gets underway, Hotel Dive spoke to hospitality leaders from differing corners of the market about their 2026 predictions. Below are the leading patterns anticipated to effect hotel operations, efficiency, net unit development and more this year.

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

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"It is an outright concern." Increasing labor costs have actually been a difficulty for hoteliers for many years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% development in overall operating profits, according to AHLA. Recently, countless union hotel workers have actually gone on strike demanding higher earnings in order to stay up to date with the increasing cost of living in locations 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 negotiations will be "front and center" in New York City, where the New York Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City is set to expire in July.

In 2015, the union backed New York City's newly elected Mayor Zorhan Mamdani, who ran on a guarantee to raise New York City's base pay to $30 per hour by 2030. Hotel market associations, consisting of AHLA, have actually knocked similar legislation throughout the country, including the just recently passed $30 wage regulation in Los Angeles. "Need has actually not kept up with this rate," she said. Salaries, salaries and payroll-related costs 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 artificial intelligence to boost their travel experience, reserving hotels directly through large language designs (LLMs) might be next, hospitality specialists stated. Agentic commerce a procedure by which autonomous AI agents act upon behalf of a customer to find, compare and complete purchases is a trend that has accelerated across industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're likely to use AI for travel suggestions. A smaller portion (57%) said they 'd be most likely to use it for booking travel. But that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of customers that are browsing [through LLMs] for services and products in travel has actually ballooned in the last 12 months and is accelerating every day," Kletzel stated, including that undoubtedly, hotels will "take a tough appearance at how they can make it possible for commerce and deals through agentic [AI]"" [Brands] can develop on the trust they currently have if they do an excellent job with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct booking, bigger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and change the way the consumer 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 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, likewise told Hotel Dive that hospitality players need to ensure their home info is being indexed by LLMs to appear in tourist queries.