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, hospitality market leaders are looking towards 2026 with cautious optimism. Increasing functional costs are slated to challenge owners this year and lower-tier sections could struggle amid a growing wealth bifurcation.

And through all of it, hotel companies are anticipated to strengthen their portfolios with new brand name offerings and partnerships. As the year gets underway, Hotel Dive spoke to hospitality leaders from differing corners of the market about their 2026 forecasts. Below are the leading trends expected to impact hotel operations, efficiency, net system growth and more this year.

Total salaries, earnings and advantages paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is projected to reach $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses present an obstacle to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright concern." Rising labor expenses have actually been an obstacle for hoteliers for many years, Davis said, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% development in overall operating revenue, according to AHLA. Recently, countless union hotel workers have actually gone on strike demanding higher salaries in order to keep up with the rising cost 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 settlements will be "front and center" in New york city City, where the New York City Hotel and Video gaming Trades Council's union agreement 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 recently elected Mayor Zorhan Mamdani, who operated on a guarantee to raise New york city City's base pay to $30 per hour by 2030. Hotel market associations, including AHLA, have actually knocked similar legislation across the country, including the just recently passed $30 wage regulation in Los Angeles. "Need has not kept up with this pace," she said. Incomes, wages and payroll-related expenses paid by hotels now account for more than 32% of total income, according to AHLA.

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As more hotel visitors turn to synthetic intelligence to improve their travel experience, reserving hotels straight through large language models (LLMs) may be next, hospitality specialists said. Agentic commerce a process by which autonomous AI agents act upon behalf of a customer to discover, compare and complete purchases is a trend that has sped up across industries like retail.

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

"If you are not visible 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 consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI client experience platform Talkdesk, similarly informed Hotel Dive that hospitality players need to guarantee their home info is being indexed by LLMs to appear in traveler inquiries.