Why Hospitality Market Value Is Rising

, hospitality industry leaders are looking toward 2026 with cautious optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier segments could struggle amid a growing wealth bifurcation.

And through all of it, hotel business are anticipated to fortify their portfolios with brand-new brand offerings and partnerships. As the year gets underway, Hotel Dive consulted with hospitality leaders from varying corners of the industry about their 2026 forecasts. Below are the leading patterns expected to impact hotel operations, performance, net system development and more this year.

Total wages, incomes and advantages paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shared with 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, rising labor expenses present a difficulty to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

Why Hospitality Market Value Is Rising

Rising labor expenses have been an obstacle for hoteliers for years, Davis said, especially following the COVID-19 pandemic. In general, hotel labor costs have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in total operating revenue, 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 City, where the New York City Hotel and Gaming Trades Council's union agreement with the Hotel Association of New York City City is set to expire in July.

"Need has actually not kept up with this speed," she said. "We're also seeing these obstacles intensified by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City City Safe Hotels Act. When need is falling and costs are skyrocketing, the math simply does not add up." Incomes, earnings and payroll-related expenditures paid by hotels now account for more than 32% of total revenue, according to AHLA.

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As more hotel guests turn to artificial intelligence to boost their travel experience, reserving hotels directly through big language models (LLMs) might be next, hospitality professionals stated. Agentic commerce a process by which self-governing AI agents act upon behalf of a customer to discover, compare and finish purchases is a trend that has sped up across 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 recommendations. A smaller percentage (57%) said they 'd be most likely to use it for reserving travel. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. "The variety of customers that are browsing [through LLMs] for product or services in travel has actually ballooned in the last 12 months and is accelerating every day," Kletzel said, adding that inevitably, hotels will "take a hard take a look at how they can allow commerce and deals through agentic [AI]"" [Brands] can build on the trust they currently have if they do a terrific job with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct booking, larger multibrand hotel business will "embed LLMs into their own brand sites and mobile apps, and alter the method the consumer searches," Kletzel said.

"If you are not visible 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 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 informed Hotel Dive that hospitality gamers require to guarantee their residential or commercial property details is being indexed by LLMs to appear in tourist inquiries.