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Listen to the short article 17 min This audio is auto-generated. Please let us know if you have feedback. Following a year of broad economic uncertainty that suppressed growth for hotels, hospitality market leaders are looking towards 2026 with mindful optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier sections could have a hard time 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 differing corners of the market about their 2026 predictions. Below are the leading trends expected to impact hotel operations, efficiency, net system growth and more this year.

Overall salaries, earnings and advantages paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses position a difficulty to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an absolute issue." Rising labor expenses have actually been an obstacle for hoteliers for several years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor costs have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in total operating earnings, according to AHLA. Over the last few years, thousands of union hotel employees have actually gone on strike demanding greater salaries in order to stay up to date with the increasing 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 negotiations will be "front and center" in New york city City, where the New York Hotel and Video gaming Trades Council's union contract with the Hotel Association of New York City City is set to end in July.

"Demand has not stayed up to date with this speed," she said. "We're also seeing these challenges compounded 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 costs are soaring, the mathematics merely doesn't build up." Salaries, incomes and payroll-related expenses paid by hotels now represent more than 32% of overall revenue, according to AHLA.

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As more hotel guests turn to synthetic intelligence to improve their travel experience, scheduling hotels directly through big language designs (LLMs) may be next, hospitality experts said. Agentic commerce a process by which self-governing AI agents act upon behalf of a consumer to discover, compare and finish purchases is a pattern that has accelerated across industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're most likely to use AI for travel recommendations. A smaller percentage (57%) stated they 'd be most likely to use it for scheduling travel. But that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The variety of customers that are browsing [by means of LLMs] for services and products in travel has actually ballooned in the last 12 months and is speeding up every day," Kletzel stated, adding that inevitably, hotels will "take a hard 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 a fantastic task with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct reservation, bigger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and alter the way the customer searches," Kletzel stated.

"If you are not discoverable in an LLM search results page which many brands aren't, and this is the huge panic that they're all going through right now consumers 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 informed Hotel Dive that hospitality gamers require to ensure their property details is being indexed by LLMs to appear in tourist queries.