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, hospitality market leaders are looking towards 2026 with cautious optimism. Increasing functional expenses 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 it all, hotel companies are anticipated to strengthen their portfolios with brand-new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying corners of the industry about their 2026 predictions. Below are the top patterns anticipated to impact hotel operations, performance, net unit growth and more this year.

Total wages, incomes and advantages paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Accommodations 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, increasing labor costs present a challenge to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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Rising labor costs have been a challenge for hoteliers for years, Davis said, especially 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 income, 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 Video gaming Trades Council's union contract with the Hotel Association of New York City is set to expire in July.

In 2015, the union backed New York City's newly elected Mayor Zorhan Mamdani, who ran on a guarantee to raise New York City's base pay to $30 per hour by 2030. Hotel industry associations, including AHLA, have knocked similar legislation across the nation, including the just recently passed $30 wage regulation in Los Angeles. "Demand has not kept up with this speed," she stated. Wages, salaries and payroll-related expenditures 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 synthetic intelligence to improve their travel experience, booking hotels straight through big language designs (LLMs) may be next, hospitality experts stated. Agentic commerce a process by which autonomous AI representatives act upon behalf of a customer to discover, compare and finish purchases is a trend that has actually accelerated throughout markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're most likely to utilize AI for travel recommendations. A smaller percentage (57%) stated they 'd be most likely to utilize it for scheduling travel. But that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of consumers that are searching [through LLMs] for product or services in travel has actually swollen in the last 12 months and is speeding up every day," Kletzel said, adding that inevitably, hotels will "take a difficult take a look at how they can make it possible for commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they currently have if they do an excellent task with how they deal with 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 sites and mobile apps, and alter the way the customer searches," Kletzel stated.

"If you are not visible in an LLM search engine result which lots of brands 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 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 questions.