Why Hospitality Market Share Will Be Surging

, hospitality market leaders are looking towards 2026 with cautious optimism. Rising functional 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 expected to strengthen their portfolios with brand-new brand name offerings and partnerships. As the year gets underway, Hotel Dive consulted with hospitality leaders from differing corners of the market about their 2026 forecasts. Below are the leading patterns anticipated to effect hotel operations, efficiency, net system growth and more this year.

Overall incomes, earnings and advantages paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses posture a challenge 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 actually been a difficulty for hoteliers for several years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor costs have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% development in total operating earnings, according to AHLA. Recently, countless union hotel employees have gone on strike demanding greater salaries in order to keep up with the rising cost of living in locations such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis kept in mind, union negotiations will be "front and center" in New york city City, where the New York Hotel and Video gaming Trades Council's union contract with the Hotel Association of New York City City is set to end in July.

Last year, the union backed New york city City's recently 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 denounced similar legislation across the nation, including the just recently passed $30 wage ordinance in Los Angeles. "Demand has not kept up with this pace," she stated. "We're also seeing these difficulties compounded by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City Safe Hotels Act. When need is falling and costs are skyrocketing, the math merely doesn't add up." Wages, wages and payroll-related costs paid by hotels now represent more than 32% of total revenue, according to AHLA.

Why Hospitality Brand Share Is Rising

As more hotel visitors turn to expert system to enhance their travel experience, scheduling hotels straight through big language models (LLMs) might be next, hospitality specialists stated. Agentic commerce a process by which autonomous AI representatives act on behalf of a consumer to discover, compare and complete purchases is a trend 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 likely to use AI for travel recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. 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 name websites and mobile apps, and alter the way the consumer searches," Kletzel said.

"If you are not visible 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 consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI customer experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers need to ensure their home info is being indexed by LLMs to appear in tourist questions.