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, hospitality industry leaders are looking toward 2026 with careful optimism. Rising functional expenses are slated to challenge owners this year and lower-tier segments could have a hard time amidst a growing wealth bifurcation.

And through it all, hotel companies are anticipated to strengthen their portfolios with brand-new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying corners of the market about their 2026 predictions. Below are the top trends expected to impact hotel operations, performance, net unit development and more this year.

Total salaries, salaries and advantages paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is predicted to climb to $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, rising labor costs present a difficulty to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an outright issue." Increasing labor costs have been a challenge for hoteliers for several years, Davis said, especially following the COVID-19 pandemic. In general, hotel labor expenses have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% development in total operating income, according to AHLA. In the last few years, thousands of union hotel employees have actually gone on strike demanding greater wages 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 via Getty Images In 2026, Davis kept in mind, union settlements will be "front and center" in New York 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 end in July.

Last year, the union backed New york city City's newly chosen Mayor Zorhan Mamdani, who operated on a pledge to raise New York City's minimum wage to $30 per hour by 2030. Hotel industry associations, including AHLA, have actually denounced similar legislation throughout the country, consisting of the recently passed $30 wage regulation in Los Angeles. "Demand has not kept up with this pace," she said. Wages, earnings and payroll-related expenses paid by hotels now account for more than 32% of overall earnings, according to AHLA.

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As more hotel guests turn to synthetic intelligence to enhance their travel experience, reserving hotels directly through big language models (LLMs) may be next, hospitality professionals said. Agentic commerce a process by which self-governing AI agents act on behalf of a consumer to find, compare and finish purchases is a trend that has actually accelerated throughout industries 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 suggestions. That number is growing, Jonathan Kletzel, PwC's travel, transport 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 business will "embed LLMs into their own brand sites and mobile apps, and alter the method the consumer searches," Kletzel stated.

"If you are not discoverable in an LLM search results page which many brand names aren't, and this is the big 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, similarly told Hotel Dive that hospitality gamers need to ensure their home information is being indexed by LLMs to appear in traveler queries.