Identifying High-ROI Business Investments in 2026

Listen to the post 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad financial unpredictability that stifled development for hotels, hospitality industry leaders are looking towards 2026 with cautious optimism. Rising operational expenses are slated to challenge owners this year and lower-tier sections could have a hard time amidst a growing wealth bifurcation.

And through all of it, hotel companies are anticipated to strengthen their portfolios with brand-new brand name offerings and partnerships. As the year gets underway, Hotel Dive talked with hospitality leaders from differing corners of the market about their 2026 predictions. Below are the top patterns expected to effect hotel operations, efficiency, net unit development and more this year.

Overall incomes, wages and benefits paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is forecasted to climb up to $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, rising labor costs position an obstacle to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute concern." Rising labor costs have actually been a difficulty for hoteliers for many years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor expenses have increased 15.3% from 2019 to 2025, outmatching the 12.8% development in overall operating profits, according to AHLA. Over the last few years, thousands of union hotel employees have gone on strike demanding higher earnings in order to stay up to date with the rising 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, where the New York City Hotel and Gaming Trades Council's union agreement with the Hotel Association of New York City is set to end in July.

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

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As more hotel guests turn to artificial intelligence to boost their travel experience, reserving hotels straight through large language designs (LLMs) may be next, hospitality experts said. Agentic commerce a process by which self-governing AI representatives act on behalf of a consumer to discover, compare and complete purchases is a pattern that has sped up throughout markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're most likely to use AI for travel suggestions. A smaller percentage (57%) stated they 'd be likely to utilize it for reserving travel. But that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The number of customers that are searching [via LLMs] for product or services in travel has actually ballooned in the last 12 months and is speeding up every day," Kletzel said, including that inevitably, hotels will "take a tough take a look at how they can allow commerce and deals through agentic [AI]"" [Brands] can construct on the trust they already have if they do a great task with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct booking, larger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and change the way the consumer searches," Kletzel said.

"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 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 info is being indexed by LLMs to appear in tourist inquiries.