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, hospitality market leaders are looking towards 2026 with careful optimism. Increasing functional costs are slated to challenge owners this year and lower-tier sections might have a hard time amidst a growing wealth bifurcation.

And through it all, hotel business are expected 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 top trends expected to effect hotel operations, efficiency, net system growth and more this year.

Total incomes, earnings and advantages paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is predicted to climb to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses position a challenge to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright issue." Increasing labor expenses have actually been an obstacle for hoteliers for several years, Davis said, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have increased 15.3% from 2019 to 2025, outmatching the 12.8% development in total operating income, according to AHLA. Over the last few years, thousands of union hotel employees have actually gone on strike requiring higher earnings in order to stay up to date with the rising cost of living in locations such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan through Getty Images In 2026, Davis kept in mind, union settlements will be "front and center" in New York City, where the New York Hotel and Video gaming Trades Council's union agreement with the Hotel Association of New York City is set to end in July.

In 2015, the union backed New york city City's freshly elected Mayor Zorhan Mamdani, who ran on a pledge to raise New York City's base pay to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have denounced comparable legislation throughout the nation, consisting of the recently passed $30 wage ordinance in Los Angeles. "Need has actually not kept up with this pace," she said. Salaries, incomes and payroll-related expenditures paid by hotels now account for more than 32% of overall income, according to AHLA.

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As more hotel guests turn to expert system to enhance their travel experience, scheduling hotels straight through large language designs (LLMs) might be next, hospitality specialists said. Agentic commerce a procedure by which autonomous AI agents act upon behalf of a customer to discover, compare and complete purchases is a pattern that has sped up throughout markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're likely to use 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 business will "embed LLMs into their own brand websites and mobile apps, and alter the method the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result which lots of brand names 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 inquiries.