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, hospitality market leaders are looking toward 2026 with cautious optimism. Rising 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 strengthen their portfolios with brand-new brand offerings and partnerships. As the year gets underway, Hotel Dive spoke with hospitality leaders from varying corners of the market about their 2026 forecasts. Below are the leading patterns anticipated to effect hotel operations, efficiency, net unit development and more this year.

Overall incomes, wages and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is projected to climb up to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses present an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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Increasing labor costs have actually been a difficulty for hoteliers for years, Davis said, particularly following the COVID-19 pandemic. In general, hotel labor expenses have increased 15.3% from 2019 to 2025, surpassing the 12.8% development in total 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, where the New York City 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 recently elected Mayor Zorhan Mamdani, who operated on a pledge to raise New York City's base pay to $30 per hour by 2030. Hotel market associations, including AHLA, have knocked similar legislation throughout the nation, consisting of the recently passed $30 wage regulation in Los Angeles. "Need has actually not kept up with this speed," she stated. "We're likewise seeing these challenges intensified by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City City Safe Hotels Act. When need is falling and costs are skyrocketing, the math simply doesn't accumulate." Salaries, wages and payroll-related expenses paid by hotels now represent more than 32% of total revenue, according to AHLA.

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As more hotel guests turn to synthetic intelligence to enhance their travel experience, scheduling hotels straight through big language designs (LLMs) might be next, hospitality specialists stated. Agentic commerce a procedure by which self-governing AI representatives act on behalf of a consumer to discover, compare and finish purchases is a pattern that has sped up 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 recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct booking, larger multibrand hotel business will "embed LLMs into their own brand name sites and mobile apps, and change the way the customer searches," Kletzel stated.

"If you are not visible in an LLM search result which lots of brand names aren't, and this is the huge panic that they're all going through today customers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality product marketing at AI client experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers require to ensure their home information is being indexed by LLMs to appear in traveler queries.