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Listen to the post 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad economic unpredictability that stifled development for hotels, hospitality market leaders are looking towards 2026 with mindful optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier segments might struggle amidst a growing wealth bifurcation.

And through all of it, hotel companies are expected to strengthen their portfolios with brand-new brand offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from varying corners of the industry about their 2026 forecasts. Below are the leading patterns expected to effect hotel operations, efficiency, net unit development and more this year.

Overall salaries, earnings and benefits paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is predicted to climb up to $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, rising labor costs position a difficulty to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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Rising labor expenses have actually been a difficulty for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor expenses have increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in total operating income, according to AHLA.

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 expire in July.

"Demand has actually not kept up with this speed," she said. "We're likewise seeing these obstacles 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 expenses are soaring, the mathematics just does not build up." Wages, wages and payroll-related expenditures paid by hotels now account for more than 32% of overall earnings, according to AHLA.

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As more hotel visitors turn to synthetic intelligence to improve their travel experience, reserving hotels straight through big language designs (LLMs) may be next, hospitality specialists said. Agentic commerce a procedure by which autonomous AI agents act on behalf of a consumer to find, compare and complete purchases is a trend that has actually 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 utilize AI for travel suggestions. A smaller sized percentage (57%) said they 'd be most likely to use it for scheduling travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of customers that are searching [via LLMs] for services and products in travel has swollen in the last 12 months and is accelerating every day," Kletzel said, adding that inevitably, hotels will "take a hard take a look at how they can enable commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they already have if they do an excellent task with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, larger multibrand hotel companies 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 lots of brand names aren't, and this is the big 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 consumer experience platform Talkdesk, likewise informed Hotel Dive that hospitality gamers require to ensure their property info is being indexed by LLMs to appear in traveler queries.