Identifying Profitable Hospitality Investments in 2026

Listen to the article 17 minutes This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad financial uncertainty that stifled growth for hotels, hospitality industry leaders are looking toward 2026 with cautious optimism. Increasing operational 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 expected to strengthen their portfolios with new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from differing corners of the industry about their 2026 forecasts. Below are the leading patterns anticipated to effect hotel operations, performance, net unit development and more this year.

Overall wages, earnings and benefits paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is forecasted to reach $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, increasing labor costs present a challenge to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

Analyzing Fast Casual Sector Growth Trends for 2026

"It is an outright issue." Increasing labor expenses have actually been a challenge for hoteliers for years, Davis said, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in overall operating earnings, according to AHLA. Over the last few years, countless union hotel employees have gone on strike demanding greater wages in order to stay up to date with the increasing expense 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 noted, union negotiations will be "front and center" in New York City, where the New York City Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City City is set to end in July.

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

Analyzing Fast Casual Market Growth Trends for 2026

As more hotel guests turn to synthetic intelligence to enhance their travel experience, booking hotels straight through large language models (LLMs) may be next, hospitality professionals stated. Agentic commerce a procedure by which autonomous AI representatives act on behalf of a consumer to find, compare and finish purchases is a trend that has accelerated throughout industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're likely to use AI for travel suggestions. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct booking, bigger multibrand hotel companies will "embed LLMs into their own brand name sites and mobile apps, and alter the way the consumer searches," Kletzel stated.

"If you are not visible in an LLM search results page which lots of brands aren't, and this is the big 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 product marketing at AI customer experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to guarantee their residential or commercial property details is being indexed by LLMs to appear in traveler inquiries.