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

And through all of it, hotel business are anticipated to strengthen their portfolios with new brand offerings and collaborations. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying corners of the market about their 2026 forecasts. Below are the leading trends anticipated to impact hotel operations, efficiency, net system growth and more this year.

Total incomes, salaries and benefits 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 predicted to reach $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, rising labor costs pose an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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Rising labor expenses have been a difficulty for hoteliers for years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor expenses have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% development in total operating revenue, according to AHLA.

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

"Demand has actually not kept up with this rate," she stated. "We're also seeing these obstacles intensified 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 accumulate." Wages, incomes and payroll-related costs paid by hotels now account for more than 32% of overall revenue, according to AHLA.

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As more hotel visitors turn to artificial intelligence to boost their travel experience, scheduling hotels directly through big language models (LLMs) might be next, hospitality specialists said. Agentic commerce a procedure by which self-governing AI representatives act on behalf of a consumer to find, compare and finish 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 stated they're most likely to use AI for travel recommendations. A smaller percentage (57%) said they 'd be likely to use it for booking travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The number 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 inevitably, hotels will "take a hard take a look at how they can allow commerce and deals through agentic [AI]"" [Brands] can develop on the trust they already have if they do a great task with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct reservation, larger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and alter the method the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result which many brand names aren't, and this is the big panic that they're all going through today consumers 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 details is being indexed by LLMs to appear in tourist inquiries.