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

And through everything, hotel companies are anticipated to fortify their portfolios with new brand offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from differing corners of the market about their 2026 forecasts. Below are the top trends expected to effect hotel operations, efficiency, net system growth and more this year.

Total incomes, wages and advantages paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is forecasted to reach $131 billion, representing a roughly 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, told Hotel Dive.

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Increasing labor expenses have been an obstacle for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor expenses have increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in total operating profits, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan through 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 end in July.

"Need has not kept up with this pace," she stated. "We're also seeing these difficulties intensified by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City City Safe Hotels Act. When demand is falling and costs are soaring, the mathematics merely doesn't accumulate." Salaries, incomes and payroll-related expenditures paid by hotels now represent more than 32% of overall income, according to AHLA.

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As more hotel guests turn to expert system to boost their travel experience, reserving hotels directly through large language models (LLMs) might be next, hospitality specialists said. Agentic commerce a procedure by which autonomous AI agents act upon behalf of a consumer to discover, compare and complete purchases is a pattern that has actually accelerated throughout markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're most likely to use AI for travel suggestions. A smaller sized portion (57%) stated they 'd be most likely to use it for reserving travel. However that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. "The number of consumers that are browsing [via LLMs] for product or services in travel has ballooned in the last 12 months and is accelerating every day," Kletzel said, adding that inevitably, hotels will "take a tough 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 fantastic job with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct reservation, larger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and alter the method the customer searches," Kletzel stated.

"If you are not discoverable in an LLM search engine result which numerous brands aren't, and this is the big panic that they're all going through right now customers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality product marketing at AI client experience platform Talkdesk, similarly told Hotel Dive that hospitality players require to ensure their residential or commercial property details is being indexed by LLMs to appear in tourist queries.