Analyzing Fast Casual Market Growth Data for 2026

, hospitality market leaders are looking toward 2026 with cautious optimism. Increasing functional costs are slated to challenge owners this year and lower-tier sectors could struggle in the middle of a growing wealth bifurcation.

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

Total salaries, earnings and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is forecasted to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, increasing labor costs pose an obstacle to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an absolute concern." Rising labor costs have actually been a difficulty for hoteliers for several years, Davis said, particularly following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, surpassing the 12.8% growth in overall operating profits, according to AHLA. In the last few years, countless union hotel workers have gone on strike requiring higher earnings 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 noted, union negotiations will be "front and center" in New york city City, where the New York City Hotel and Video 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 recently chosen Mayor Zorhan Mamdani, who ran on a promise to raise New York City's base pay to $30 per hour by 2030. Hotel industry associations, including AHLA, have actually denounced similar legislation throughout the country, consisting of the just recently passed $30 wage ordinance in Los Angeles. "Demand has actually not kept up with this speed," she stated. Salaries, wages and payroll-related expenditures paid by hotels now account for more than 32% of total income, according to AHLA.

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As more hotel visitors turn to synthetic intelligence to enhance their travel experience, scheduling hotels directly through big language designs (LLMs) may be next, hospitality specialists said. Agentic commerce a process by which self-governing AI agents act on behalf of a consumer to discover, compare and complete purchases is a trend that has sped up throughout markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're most likely to utilize AI for travel suggestions. A smaller sized percentage (57%) stated they 'd be most likely to use it for scheduling travel. However that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The variety of consumers that are browsing [through LLMs] for product or services in travel has actually swollen in the last 12 months and is accelerating every day," Kletzel stated, including that undoubtedly, hotels will "take a tough take a look at how they can enable commerce and deals through agentic [AI]"" [Brands] can construct on the trust they currently have if they do a fantastic task with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct booking, bigger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and change the method the customer searches," Kletzel stated.

"If you are not visible in an LLM search results page which numerous brands aren't, and this is the big panic that they're all going through today consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to ensure their home details is being indexed by LLMs to appear in traveler inquiries.