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, hospitality market leaders are looking toward 2026 with careful optimism. Rising functional expenses are slated to challenge owners this year and lower-tier sectors could have a hard time in the middle of a growing wealth bifurcation.

And through all of it, hotel companies are expected to strengthen their portfolios with brand-new brand name offerings and partnerships. As the year gets underway, Hotel Dive spoke with hospitality leaders from differing corners of the industry about their 2026 predictions. Below are the leading patterns anticipated to effect hotel operations, performance, net unit growth and more this year.

Overall salaries, incomes and advantages paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, rising labor expenses position an obstacle to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an absolute concern." Increasing labor costs have been a difficulty for hoteliers for many years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in overall operating earnings, according to AHLA. Over the last few years, thousands of union hotel employees have actually gone on strike requiring higher salaries in order to stay up to date with the rising expense of living in places 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 City, where the New York Hotel and Video gaming Trades Council's union agreement with the Hotel Association of New York City City is set to end in July.

Last year, the union backed New York City's freshly elected Mayor Zorhan Mamdani, who worked on a pledge to raise New york city City's base pay to $30 per hour by 2030. Hotel market associations, consisting of AHLA, have denounced comparable legislation across the country, consisting of the recently passed $30 wage regulation in Los Angeles. "Demand has not kept up with this pace," she stated. Incomes, incomes and payroll-related expenses paid by hotels now account for more than 32% of overall income, according to AHLA.

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As more hotel visitors turn to expert system to enhance their travel experience, booking hotels directly through large 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 actually sped up across industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're most likely to utilize AI for travel suggestions. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality product 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 change the way the consumer searches," Kletzel stated.

"If you are not discoverable in an LLM search results page which numerous brand names aren't, and this is the huge 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 item marketing at AI customer experience platform Talkdesk, similarly told Hotel Dive that hospitality players need to guarantee their residential or commercial property information is being indexed by LLMs to appear in traveler questions.