Analyzing Fast Casual Market Growth Data for 2026

Listen to the article 17 min This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad financial unpredictability that suppressed growth for hotels, hospitality industry leaders are looking towards 2026 with careful optimism. Increasing functional costs are slated to challenge owners this year and lower-tier sectors could struggle amidst a growing wealth bifurcation.

And through all of it, hotel business are anticipated to strengthen their portfolios with brand-new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from varying corners of the industry about their 2026 predictions. Below are the leading trends expected to impact hotel operations, efficiency, net system development and more this year.

Overall wages, salaries 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 predicted to climb up to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, rising labor costs present a difficulty to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

Major Global Milestones in Hospitality Development

Rising labor expenses have actually been an obstacle for hoteliers for years, Davis said, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, surpassing the 12.8% development in overall operating earnings, according to AHLA.

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

"Demand has actually not stayed up to date with this rate," she stated. "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 expenses are soaring, the mathematics merely does not accumulate." Wages, earnings and payroll-related expenditures paid by hotels now represent more than 32% of total earnings, according to AHLA.

Targeting Profitable Business Ventures in 2026

As more hotel guests turn to artificial intelligence to boost their travel experience, reserving hotels directly through big language designs (LLMs) might be next, hospitality professionals stated. Agentic commerce a process by which self-governing AI representatives act on behalf of a customer to discover, compare and complete purchases is a trend that has 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 suggestions. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct reservation, bigger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and alter the method the customer searches," Kletzel stated.

"If you are not discoverable in an LLM search engine result which numerous brands aren't, and this is the huge 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 product marketing at AI customer experience platform Talkdesk, likewise informed Hotel Dive that hospitality players need to ensure their home details is being indexed by LLMs to appear in traveler inquiries.