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, hospitality market leaders are looking towards 2026 with cautious optimism. Rising functional expenses are slated to challenge owners this year and lower-tier sections might have a hard time amidst a growing wealth bifurcation.

And through everything, hotel companies are anticipated to fortify their portfolios with new brand name offerings and partnerships. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying corners of the market about their 2026 forecasts. Below are the top trends expected to impact hotel operations, performance, net unit 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 a roughly 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses pose an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

Key Global Shifts in Hospitality Expansion

Increasing labor expenses have been a challenge for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. In general, hotel labor costs have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% development in total operating earnings, according to AHLA.

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.

Last year, the union backed New york city City's recently chosen Mayor Zorhan Mamdani, who worked on a promise to raise New york city City's minimum wage to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have knocked similar legislation throughout the nation, including the just recently passed $30 wage ordinance in Los Angeles. "Demand has not kept up with this speed," she stated. Wages, incomes and payroll-related expenses paid by hotels now account for more than 32% of total income, according to AHLA.

Emerging Hospitality Industry Trends Driving Future Success

As more hotel visitors turn to artificial intelligence to improve their travel experience, scheduling hotels straight through large language designs (LLMs) might be next, hospitality professionals said. Agentic commerce a procedure by which self-governing AI representatives act on behalf of a customer to discover, compare and complete purchases is a pattern that has actually accelerated across markets 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 recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. 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 sites and mobile apps, and change the way the customer searches," Kletzel stated.

"If you are not discoverable in an LLM search result which many brands aren't, and this is the huge panic that they're all going through today customers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers require to guarantee their residential or commercial property information is being indexed by LLMs to appear in tourist queries.