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Listen to the article 17 minutes This audio is auto-generated. Please let us know if you have feedback. Following a year of broad economic uncertainty that suppressed development for hotels, hospitality industry leaders are looking towards 2026 with mindful optimism. Increasing operational costs are slated to challenge owners this year and lower-tier sectors could have a hard time amidst a growing wealth bifurcation.

And through everything, hotel companies are expected to fortify their portfolios with new brand name offerings and collaborations. As the year gets underway, Hotel Dive consulted with hospitality leaders from varying corners of the industry about their 2026 forecasts. Below are the leading patterns expected to effect hotel operations, efficiency, net unit growth and more this year.

Overall incomes, wages and benefits paid by U.S. hotels increased to $127 billion in 2025, according to information 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 boost, per AHLA. For hotel owners, increasing labor costs pose a challenge to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright issue." Rising labor costs have been a challenge for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, outmatching the 12.8% development in overall operating revenue, according to AHLA. Recently, countless union hotel workers have gone on strike requiring greater salaries in order to keep up with the increasing expense of living in locations such as California, Hawaii and Las Vegas.

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

In 2015, the union backed New York City's freshly elected Mayor Zorhan Mamdani, who operated on a promise to raise New york city City's base pay to $30 per hour by 2030. Hotel industry associations, including AHLA, have knocked similar legislation across the nation, consisting of the just recently passed $30 wage ordinance in Los Angeles. "Demand has not stayed up to date with this rate," she said. "We're likewise seeing these difficulties 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 expenses are soaring, the math simply does not accumulate." Wages, wages and payroll-related expenses paid by hotels now account for more than 32% of total income, according to AHLA.

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As more hotel guests turn to synthetic intelligence to boost their travel experience, scheduling hotels straight through big language designs (LLMs) might be next, hospitality specialists said. Agentic commerce a process by which autonomous AI agents act on behalf of a consumer to find, compare and finish purchases is a trend that has actually accelerated across industries 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 suggestions. A smaller sized percentage (57%) stated they 'd be likely to use it for scheduling travel. However that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The number of customers that are searching [by means of LLMs] for product or services in travel has actually swollen in the last 12 months and is speeding up every day," Kletzel said, including that inevitably, hotels will "take a hard look at how they can enable commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they already have if they do a great task with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand name websites and mobile apps, and change the method the consumer searches," Kletzel said.

"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 stated. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers need to ensure their home information is being indexed by LLMs to appear in traveler inquiries.