Identifying Profitable Business 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 economic uncertainty that stifled growth for hotels, hospitality market leaders are looking towards 2026 with careful optimism. Rising operational costs are slated to challenge owners this year and lower-tier sectors might struggle amid a growing wealth bifurcation.

And through all of it, hotel business are expected to fortify their portfolios with new brand offerings and collaborations. As the year gets underway, Hotel Dive consulted with hospitality leaders from differing corners of the market about their 2026 predictions. Below are the top trends expected to effect hotel operations, performance, net system growth and more this year.

Total wages, incomes and advantages paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, rising labor expenses present a difficulty to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

Will Fast Casual Investments Remain Lucrative in 2026?

Rising labor costs have actually been a challenge for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor expenses have increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in overall operating revenue, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan through Getty Images In 2026, Davis noted, 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 is set to end in July.

"Need has not kept up with this speed," she stated. Salaries, incomes and payroll-related expenses paid by hotels now account for more than 32% of total revenue, according to AHLA.

The Future of 2026 Brand Growth Milestones

As more hotel visitors turn to expert system to boost their travel experience, scheduling hotels straight through big language models (LLMs) may be next, hospitality experts said. Agentic commerce a process by which self-governing AI representatives act upon behalf of a consumer to discover, compare and finish purchases is a pattern that has actually accelerated across markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated 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 reservation, larger multibrand hotel business 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 result which many brands aren't, and this is the big panic that they're all going through today customers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI client experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers require to guarantee their residential or commercial property details is being indexed by LLMs to appear in tourist queries.