Why Fast Casual Market Share Will Be Surging

Listen to the post 17 min This audio is auto-generated. Please let us know if you have feedback. Following a year of broad financial uncertainty that stifled development for hotels, hospitality market leaders are looking towards 2026 with mindful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier sections could struggle 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 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 top trends anticipated to effect hotel operations, efficiency, net unit growth and more this year.

Overall incomes, incomes and advantages paid by U.S. hotels rose 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, rising labor expenses position an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

Emerging Hospitality Industry Trends Driving Future Success

"It is an absolute concern." Increasing labor costs have been a difficulty for hoteliers for years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor costs have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in total operating profits, according to AHLA. Over the last few years, countless union hotel employees have gone on strike requiring greater incomes in order to stay up to date with the rising expense 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 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 City is set to expire in July.

"Need has actually not kept up with this speed," she stated. Incomes, salaries and payroll-related expenses paid by hotels now account for more than 32% of overall profits, according to AHLA.

Why Fast Casual Brand Share Is Rising

As more hotel guests turn to expert system to improve their travel experience, booking hotels directly through big language designs (LLMs) may be next, hospitality experts stated. Agentic commerce a procedure by which self-governing AI agents act on behalf of a consumer to discover, compare and finish purchases is a trend that has actually sped up throughout markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're most likely to utilize AI for travel recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain 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 stated.

"If you are not visible in an LLM search engine result which numerous brands aren't, and this is the huge panic that they're all going through today consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI client experience platform Talkdesk, likewise informed Hotel Dive that hospitality players need to ensure their home information is being indexed by LLMs to appear in tourist queries.