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, hospitality market leaders are looking towards 2026 with mindful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier segments might struggle amidst a growing wealth bifurcation.

And through it all, hotel business are expected to fortify their portfolios with brand-new brand 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 effect hotel operations, performance, net system growth and more this year.

Total salaries, incomes and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is forecasted to climb up to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor costs present an obstacle to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute concern." Increasing labor expenses have been a difficulty for hoteliers for many years, Davis stated, especially following the COVID-19 pandemic. In general, hotel labor expenses have increased 15.3% from 2019 to 2025, outpacing the 12.8% development in overall operating income, according to AHLA. In the last few years, thousands of union hotel workers have actually gone on strike demanding greater salaries 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 kept in mind, union negotiations will be "front and center" in New york city City, where the New York City Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City is set to expire in July.

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

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As more hotel visitors turn to artificial intelligence to improve their travel experience, booking hotels directly through large language designs (LLMs) might be next, hospitality professionals stated. Agentic commerce a procedure by which autonomous AI agents act on behalf of a customer to find, compare and finish purchases is a pattern that has actually sped up throughout industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're likely to utilize AI for travel recommendations. 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, bigger multibrand hotel companies will "embed LLMs into their own brand name sites and mobile apps, and alter the method the customer searches," Kletzel said.

"If you are not visible in an LLM search result which lots of brands aren't, and this is the big panic that they're all going through right now consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality product marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality players need to ensure their property info is being indexed by LLMs to appear in tourist queries.