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, hospitality industry leaders are looking towards 2026 with cautious optimism. Increasing operational costs are slated to challenge owners this year and lower-tier sectors could have a hard time in the middle of a growing wealth bifurcation.

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

Total salaries, wages and advantages paid by U.S. hotels increased 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 increase, per AHLA. For hotel owners, rising labor expenses pose an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an absolute concern." Increasing labor expenses have actually been a challenge for hoteliers for many years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor costs have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in overall operating earnings, according to AHLA. Over the last few years, thousands of union hotel employees have gone on strike demanding greater wages in order to keep up with the rising expense of living in locations 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 settlements will be "front and center" in New York City, where the New York City Hotel and Gaming Trades Council's union agreement with the Hotel Association of New York City is set to expire in July.

Last year, the union backed New York City's newly chosen Mayor Zorhan Mamdani, who operated on a guarantee to raise New york city City's base pay to $30 per hour by 2030. Hotel industry associations, including AHLA, have actually denounced comparable legislation throughout the country, including the recently passed $30 wage ordinance in Los Angeles. "Demand has actually not kept up with this speed," she said. "We're likewise seeing these challenges compounded by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City City Safe Hotels Act. When need is falling and costs are soaring, the math merely doesn't include up." Salaries, salaries and payroll-related expenditures paid by hotels now account for more than 32% of total income, according to AHLA.

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As more hotel visitors turn to expert system to improve their travel experience, scheduling hotels straight through large language designs (LLMs) may be next, hospitality experts stated. Agentic commerce a procedure by which self-governing AI representatives act on behalf of a consumer to discover, compare and finish purchases is a pattern that has actually sped up across markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're most likely to use AI for travel recommendations. A smaller percentage (57%) stated they 'd be most likely to use it for booking travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The number of consumers that are searching [via LLMs] for services and products in travel has actually swollen 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 make it possible for commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they already have if they do a great job with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct booking, larger multibrand hotel business will "embed LLMs into their own brand name websites and mobile apps, and alter the method the customer searches," Kletzel said.

"If you are not visible in an LLM search result which numerous brand names 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 client experience platform Talkdesk, likewise informed Hotel Dive that hospitality gamers need to ensure their property details is being indexed by LLMs to appear in traveler queries.