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Listen to the article 17 minutes This audio is auto-generated. Please let us know if you have feedback. Following a year of broad financial uncertainty that stifled growth for hotels, hospitality market leaders are looking toward 2026 with mindful optimism. Increasing operational costs are slated to challenge owners this year and lower-tier segments could have a hard time amid a growing wealth bifurcation.

And through everything, hotel business are anticipated to strengthen their portfolios with brand-new brand offerings and partnerships. As the year gets underway, Hotel Dive spoke with hospitality leaders from differing corners of the industry about their 2026 forecasts. Below are the top trends expected to impact hotel operations, efficiency, net system development and more this year.

Overall incomes, salaries and advantages paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is projected to reach $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, rising labor costs posture 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 outright issue." Rising labor costs have actually been an obstacle for hoteliers for several years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% development in overall operating profits, according to AHLA. In the last few years, thousands of union hotel workers have gone on strike requiring higher wages in order to keep up with the rising cost of living in places such as California, Hawaii and Las Vegas.

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 City Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City City is set to end in July.

"Demand has not kept up with this rate," she stated. "We're also seeing these challenges 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 soaring, the math simply doesn't include up." Salaries, earnings and payroll-related expenditures paid by hotels now account for more than 32% of total profits, according to AHLA.

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As more hotel guests turn to synthetic intelligence to boost their travel experience, scheduling hotels straight through large language designs (LLMs) may be next, hospitality specialists stated. Agentic commerce a process by which autonomous AI agents act on behalf of a consumer to discover, compare and finish purchases is a pattern that has sped up 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 percentage (57%) stated they 'd be likely to use it for scheduling travel. However that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. "The variety of customers that are searching [via LLMs] for items and services in travel has actually swollen in the last 12 months and is accelerating every day," Kletzel said, adding that undoubtedly, hotels will "take a tough take a look at how they can allow commerce and deals through agentic [AI]"" [Brands] can develop on the trust they currently have if they do a great job with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand name sites and mobile apps, and change the way the customer searches," Kletzel said.

"If you are not visible in an LLM search engine result which numerous 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 stated. Michael Klein, head of retail, travel and hospitality item marketing at AI client experience platform Talkdesk, similarly informed Hotel Dive that hospitality gamers need to ensure their home info is being indexed by LLMs to appear in tourist questions.