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

And through all of it, hotel companies are expected to fortify their portfolios with brand-new brand name offerings and partnerships. As the year gets underway, Hotel Dive talked to hospitality leaders from varying corners of the market about their 2026 forecasts. Below are the top patterns expected to impact hotel operations, performance, net system development and more this year.

Total wages, earnings and benefits paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is projected to reach $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, rising labor costs pose an obstacle to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright concern." Increasing labor costs have actually been a difficulty for hoteliers for several years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, outpacing the 12.8% development in overall operating earnings, according to AHLA. In current years, thousands of union hotel workers have actually gone on strike demanding greater incomes in order to keep up with the rising expense 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 kept in mind, union negotiations will be "front and center" in New york city City, where the New York Hotel and Video gaming Trades Council's union agreement with the Hotel Association of New York City City is set to end in July.

"Need has not kept up with this speed," she said. Salaries, salaries and payroll-related costs 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 enhance their travel experience, reserving hotels straight through large language designs (LLMs) might be next, hospitality professionals said. Agentic commerce a process by which autonomous AI representatives act on behalf of a customer to find, compare and finish purchases is a pattern that has actually accelerated throughout industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're likely to utilize AI for travel recommendations. A smaller portion (57%) stated they 'd be likely to use it for reserving travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of customers that are browsing [via LLMs] for items and services in travel has actually ballooned in the last 12 months and is accelerating every day," Kletzel said, including that undoubtedly, hotels will "take a tough take a look at how they can enable commerce and transactions through agentic [AI]"" [Brands] can build 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 item marketing at Talkdesk To stay competitive with direct booking, larger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and change the method the consumer searches," Kletzel stated.

"If you are not discoverable in an LLM search engine result which numerous brands aren't, and this is the huge 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 product marketing at AI consumer experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers need to ensure their property details is being indexed by LLMs to appear in tourist inquiries.