Comparing Leading Franchise Models for 2026

, hospitality market leaders are looking toward 2026 with careful optimism. Rising operational costs are slated to challenge owners this year and lower-tier sectors might struggle amid a growing wealth bifurcation.

And through it all, hotel business are expected to strengthen their portfolios with new brand name offerings and collaborations. 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 unit development and more this year.

Total incomes, incomes and benefits paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is forecasted 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.

Top Lucrative Franchise Opportunities for 2026

"It is an outright issue." Rising labor expenses have actually been a difficulty for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, outmatching the 12.8% development in total operating revenue, according to AHLA. Over the last few years, countless union hotel employees have gone on strike demanding higher salaries 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 noted, union negotiations will be "front and center" in New York City, where the New York City Hotel and Video gaming Trades Council's union agreement with the Hotel Association of New York City City is set to expire in July.

"Demand has not kept up with this pace," she stated. Wages, incomes 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 guests turn to synthetic intelligence to enhance their travel experience, scheduling hotels directly through big language designs (LLMs) may be next, hospitality specialists said. Agentic commerce a process by which self-governing AI representatives act upon behalf of a customer to find, compare and complete purchases is a pattern that has actually accelerated across industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're most likely to utilize AI for travel recommendations. A smaller sized percentage (57%) stated they 'd be likely to utilize it for booking travel. However that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The number of consumers that are browsing [via LLMs] for product or services 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 allow commerce and deals through agentic [AI]"" [Brands] can construct on the trust they already have if they do a great job 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 reservation, bigger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and change the way the customer searches," Kletzel stated.

"If you are not discoverable in an LLM search result which numerous brands aren't, and this is the big panic that they're all going through right now consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI client experience platform Talkdesk, similarly informed Hotel Dive that hospitality gamers need to guarantee their home info is being indexed by LLMs to appear in traveler queries.