Top Lucrative Franchise Prospects for the Future

, hospitality market leaders are looking towards 2026 with cautious optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier segments might have a hard time amidst a growing wealth bifurcation.

And through everything, hotel companies are anticipated to strengthen their portfolios with brand-new brand offerings and partnerships. As the year gets underway, Hotel Dive talked to hospitality leaders from differing corners of the industry about their 2026 predictions. Below are the leading trends anticipated to impact hotel operations, performance, net system 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, shared with Hotel Dive. In 2026, that figure is forecasted to reach $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, rising labor expenses posture a difficulty to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

Emerging Hospitality Market Trends Driving Future Success

Increasing labor costs have been a challenge for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% development in total operating profits, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan through 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 is set to expire in July.

"Demand has actually not kept up with this speed," she stated. Wages, incomes and payroll-related expenditures paid by hotels now account for more than 32% of total profits, according to AHLA.

Why Hospitality Market Share Will Be Rising

As more hotel guests turn to artificial intelligence to enhance their travel experience, scheduling hotels directly through big language designs (LLMs) might be next, hospitality experts stated. Agentic commerce a procedure by which autonomous AI agents act upon behalf of a consumer to discover, compare and finish purchases is a pattern that has actually accelerated throughout industries like retail.

Freddy's Frozen Custard & Steakburgers

According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're likely to use AI for travel recommendations. A smaller sized percentage (57%) said they 'd be likely to utilize it for scheduling travel. But that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The number of customers that are browsing [through LLMs] for product or services in travel has actually swollen in the last 12 months and is speeding up every day," Kletzel said, including that inevitably, hotels will "take a difficult appearance at how they can make it possible for commerce and transactions through agentic [AI]"" [Brands] can develop on the trust they already have if they do a terrific job with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct booking, bigger multibrand hotel business will "embed LLMs into their own brand name sites and mobile apps, and alter the method the customer searches," Kletzel stated.

"If you are not visible in an LLM search engine result which numerous brands aren't, and this is the big panic that they're all going through right now customers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI customer experience platform Talkdesk, likewise told Hotel Dive that hospitality players need to guarantee their home info is being indexed by LLMs to appear in tourist inquiries.