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, hospitality industry leaders are looking toward 2026 with mindful optimism. Rising functional costs are slated to challenge owners this year and lower-tier sections could struggle amidst a growing wealth bifurcation.

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

Total salaries, wages and benefits paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is forecasted to climb up to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, rising labor costs pose an obstacle to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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Increasing labor costs have been a challenge for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in overall operating earnings, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis noted, union negotiations 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 City's freshly chosen Mayor Zorhan Mamdani, who operated on a guarantee to raise New York City's minimum wage to $30 per hour by 2030. Hotel market associations, consisting of AHLA, have actually denounced similar legislation across the country, consisting of the recently passed $30 wage regulation in Los Angeles. "Need has actually not kept up with this rate," she stated. Salaries, wages 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 directly through big language designs (LLMs) may be next, hospitality professionals stated. Agentic commerce a procedure by which self-governing AI representatives act upon behalf of a consumer to discover, compare and complete purchases is a pattern that has sped up across industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're most likely to use AI for travel recommendations. A smaller portion (57%) stated they 'd be most likely to utilize it for booking travel. However that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The number of customers that are browsing [by means of LLMs] for products and services in travel has swollen in the last 12 months and is accelerating every day," Kletzel said, adding that undoubtedly, hotels will "take a hard appearance at how they can make it possible for commerce and deals through agentic [AI]"" [Brands] can construct on the trust they currently have if they do a fantastic task with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct booking, larger multibrand hotel business will "embed LLMs into their own brand sites and mobile apps, and alter the way the customer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result which many brands aren't, and this is the huge 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 product marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality players need to guarantee their residential or commercial property info is being indexed by LLMs to appear in traveler inquiries.