The Outlook of 2026 Brand Growth Milestones

Listen to the article 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad financial unpredictability that stifled growth for hotels, hospitality industry leaders are looking toward 2026 with mindful optimism. Rising functional expenses are slated to challenge owners this year and lower-tier sectors could have a hard time amidst a growing wealth bifurcation.

And through all of it, hotel companies are expected to fortify their portfolios with new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from varying corners of the market about their 2026 forecasts. Below are the top trends anticipated to effect hotel operations, performance, net unit growth and more this year.

Total wages, incomes and advantages 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 forecasted to reach $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, rising labor expenses present an obstacle to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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Increasing labor costs have actually been a difficulty for hoteliers for years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have increased 15.3% from 2019 to 2025, surpassing the 12.8% growth in overall operating revenue, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan through Getty Images In 2026, Davis kept in mind, 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.

In 2015, the union backed New York City's newly chosen Mayor Zorhan Mamdani, who ran on a guarantee to raise New york city City's minimum wage to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have knocked similar legislation throughout the country, including the recently passed $30 wage regulation in Los Angeles. "Need has actually not kept up with this rate," she stated. "We're likewise seeing these difficulties intensified 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 expenses are skyrocketing, the math just does not add up." Incomes, wages and payroll-related expenses paid by hotels now account for more than 32% of overall revenue, according to AHLA.

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As more hotel guests turn to artificial intelligence to boost their travel experience, booking hotels straight through big language models (LLMs) may be next, hospitality experts said. Agentic commerce a procedure by which self-governing AI representatives act upon behalf of a customer to find, compare and finish purchases is a trend that has actually accelerated across markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're likely to utilize AI for travel recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct booking, larger multibrand hotel companies will "embed LLMs into their own brand name sites and mobile apps, and change the way the consumer 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 product marketing at AI client experience platform Talkdesk, similarly told Hotel Dive that hospitality players require to guarantee their residential or commercial property details is being indexed by LLMs to appear in traveler questions.