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, hospitality market leaders are looking toward 2026 with cautious optimism. Rising operational expenses are slated to challenge owners this year and lower-tier segments 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 offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from differing corners of the market about their 2026 predictions. Below are the top trends expected to effect hotel operations, efficiency, net unit development and more this year.

Overall wages, incomes and benefits 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 projected to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, increasing labor expenses posture a difficulty to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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Rising labor expenses have been a challenge for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. In general, hotel labor expenses have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% development in overall 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 settlements will be "front and center" in New York City, where the New York Hotel and Video gaming Trades Council's union contract 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 chosen Mayor Zorhan Mamdani, who worked on a promise to raise New York City's base pay to $30 per hour by 2030. Hotel market associations, including AHLA, have knocked similar legislation across the country, consisting of the recently passed $30 wage regulation in Los Angeles. "Need has not kept up with this rate," she said. "We're likewise seeing these obstacles compounded 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 just doesn't add up." Incomes, incomes and payroll-related expenses 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 synthetic intelligence to improve their travel experience, reserving hotels directly through large language designs (LLMs) might be next, hospitality experts stated. Agentic commerce a process by which autonomous AI representatives act on behalf of a consumer to discover, compare and finish purchases is a pattern that has actually accelerated throughout industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're most likely to use AI for travel suggestions. A smaller sized portion (57%) said they 'd be most likely to utilize it for scheduling travel. But that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. "The variety of consumers that are searching [through LLMs] for product or services in travel has actually ballooned in the last 12 months and is accelerating every day," Kletzel said, including that inevitably, hotels will "take a hard take a look at how they can make it possible for commerce and deals through agentic [AI]"" [Brands] can develop on the trust they already have if they do a fantastic 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 name websites and mobile apps, and alter the way the customer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result which numerous brand names aren't, and this is the huge panic that they're all going through right now consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to guarantee their home information is being indexed by LLMs to appear in traveler queries.