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Listen to the article 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad economic uncertainty that suppressed development for hotels, hospitality market leaders are looking towards 2026 with mindful optimism. Increasing operational costs are slated to challenge owners this year and lower-tier sections might have a hard time amid a growing wealth bifurcation.

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

Total wages, incomes and benefits paid by U.S. hotels increased to $127 billion in 2025, according to information 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 boost, per AHLA. For hotel owners, rising labor expenses present a challenge to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute concern." Rising labor costs have actually been a challenge for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in overall operating earnings, according to AHLA. Over the last few years, countless union hotel employees have actually gone on strike demanding greater wages in order to keep up 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 noted, union negotiations will be "front and center" in New York 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 end in July.

"Need has not kept up with this pace," she stated. "We're likewise seeing these difficulties compounded by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City City Safe Hotels Act. When demand is falling and costs are skyrocketing, the mathematics simply does not include up." Wages, wages and payroll-related costs paid by hotels now represent more than 32% of overall profits, according to AHLA.

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As more hotel guests turn to synthetic intelligence to boost their travel experience, reserving hotels straight through large language models (LLMs) might be next, hospitality experts said. Agentic commerce a procedure by which self-governing AI agents act on behalf of a customer to discover, compare and complete purchases is a pattern that has sped up across industries like retail.

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According to PwC's 2025 Holiday 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 remain competitive with direct booking, bigger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and alter the way the consumer searches," Kletzel stated.

"If you are not visible in an LLM search engine result which many brands 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 consumer experience platform Talkdesk, likewise informed Hotel Dive that hospitality players need to guarantee their property information is being indexed by LLMs to appear in traveler inquiries.