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, hospitality industry leaders are looking towards 2026 with careful optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier sections might struggle amidst a growing wealth bifurcation.

And through all of it, hotel business are anticipated to strengthen their portfolios with new brand name offerings and partnerships. As the year gets underway, Hotel Dive talked to hospitality leaders from varying corners of the industry about their 2026 forecasts. Below are the leading patterns anticipated to impact hotel operations, performance, net unit development and more this year.

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

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"It is an absolute issue." Increasing labor expenses have actually been a challenge for hoteliers for several years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in total operating income, according to AHLA. Over the last few years, thousands of union hotel workers have actually gone on strike requiring higher wages in order to keep up with the increasing cost of living in locations such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan by means of Getty Images In 2026, Davis noted, union negotiations 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 expire in July.

Last year, the union backed New york city City's freshly elected Mayor Zorhan Mamdani, who operated on a guarantee to raise New York City's minimum wage 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 ordinance in Los Angeles. "Demand has not kept up with this pace," she stated. Wages, 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 guests turn to expert system to boost their travel experience, booking hotels straight through big language designs (LLMs) may be next, hospitality specialists said. Agentic commerce a process by which self-governing AI agents act upon behalf of a consumer to discover, compare and finish purchases is a trend that has accelerated across industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're likely to utilize AI for travel recommendations. A smaller percentage (57%) said they 'd be likely to utilize it for reserving travel. But that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The variety of customers that are browsing [via LLMs] for products and services in travel has actually swollen in the last 12 months and is speeding up every day," Kletzel said, including that inevitably, hotels will "take a difficult look at how they can make it possible for commerce and deals through agentic [AI]"" [Brands] can build on the trust they currently have if they do an excellent task with how they handle AI in 2026." 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 sites and mobile apps, and change the method the customer searches," Kletzel said.

"If you are not discoverable in an LLM search engine 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 said. 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 questions.