Smart Ways to Increase Brand Share via Expansion

Listen to the article 17 min This audio is auto-generated. Please let us know if you have feedback. Following a year of broad financial uncertainty that suppressed development for hotels, hospitality industry leaders are looking towards 2026 with careful optimism. Rising functional costs are slated to challenge owners this year and lower-tier segments could struggle amidst a growing wealth bifurcation.

And through everything, hotel business are expected to strengthen 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 predictions. Below are the top patterns anticipated to effect hotel operations, efficiency, net unit development and more this year.

Overall wages, earnings and advantages paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is projected to climb up to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, rising labor expenses pose a challenge 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 an obstacle for hoteliers for years, Davis said, particularly following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in overall operating income, according to AHLA.

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

Last year, the union backed New York City's freshly 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 comparable legislation throughout the nation, including the just recently passed $30 wage ordinance in Los Angeles. "Need has not stayed up to date with this pace," she stated. "We're also seeing these difficulties intensified 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 expenses are soaring, the math just doesn't accumulate." Incomes, wages and payroll-related costs paid by hotels now account for more than 32% of total income, according to AHLA.

Expert Ways to Boost Brand Share via Expansion

As more hotel visitors turn to artificial intelligence to boost their travel experience, booking hotels directly through big language models (LLMs) might be next, hospitality experts stated. 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 sped up throughout markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're most likely to use AI for travel suggestions. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct reservation, larger multibrand hotel companies will "embed LLMs into their own brand name sites and mobile apps, and change the method the customer 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 today customers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality product marketing at AI customer experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to guarantee their home details is being indexed by LLMs to appear in traveler inquiries.