Can Fast Casual Investments Be Profitable in 2026?

, hospitality market leaders are looking towards 2026 with cautious optimism. Rising operational expenses are slated to challenge owners this year and lower-tier sections could struggle in the middle of a growing wealth bifurcation.

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

Total incomes, wages and advantages 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 to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, increasing labor costs posture a challenge to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

Modern Restaurant Industry Trends Fueling Future Success

Increasing labor costs have been an obstacle for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. In general, hotel labor costs have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% development in total operating income, according to AHLA.

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 Video gaming Trades Council's union contract with the Hotel Association of New York City City is set to expire in July.

"Need has not stayed up to date with this rate," she stated. "We're also seeing these obstacles compounded by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City Safe Hotels Act. When demand is falling and costs are soaring, the mathematics simply doesn't build up." Wages, earnings and payroll-related expenditures paid by hotels now represent more than 32% of total revenue, according to AHLA.

The Outlook of Global Brand Growth Strategies

As more hotel guests turn to synthetic intelligence to improve their travel experience, scheduling hotels directly through large language designs (LLMs) might be next, hospitality specialists stated. Agentic commerce a process by which self-governing AI representatives act on behalf of a consumer to discover, compare and finish purchases is a pattern that has actually accelerated across markets like retail.

Freddy's Frozen Custard & Steakburgers

According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're most likely to use AI for travel suggestions. A smaller sized percentage (57%) said they 'd be likely to use it for booking travel. However that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of consumers that are browsing [through LLMs] for products and services in travel has ballooned in the last 12 months and is speeding up every day," Kletzel said, including that inevitably, hotels will "take a hard take a look at how they can allow commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they already have if they do a terrific job with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain 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 stated.

"If you are not visible in an LLM search result which lots of brand names 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 product marketing at AI customer experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers require to guarantee their property details is being indexed by LLMs to appear in traveler questions.