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, hospitality industry leaders are looking toward 2026 with careful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier sectors might have a hard time in the middle of a growing wealth bifurcation.

And through it all, hotel companies are expected to strengthen 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 leading patterns anticipated to impact hotel operations, performance, net unit development and more this year.

Overall wages, incomes and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Lodging 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, rising labor expenses position a difficulty to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute concern." Increasing labor expenses have been a challenge for hoteliers for several years, Davis said, especially following the COVID-19 pandemic. In general, hotel labor costs have actually increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in overall operating income, according to AHLA. Recently, thousands of union hotel employees have actually gone on strike requiring higher salaries in order to keep up with the increasing cost of living in places such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan through 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 Video gaming Trades Council's union contract with the Hotel Association of New York City City is set to expire in July.

Last year, the union backed New York City's freshly chosen Mayor Zorhan Mamdani, who operated on a promise to raise New York City's minimum wage to $30 per hour by 2030. Hotel market associations, including AHLA, have denounced similar legislation across the nation, including the just recently passed $30 wage ordinance in Los Angeles. "Demand has not kept up with this pace," she stated. Incomes, incomes and payroll-related expenses paid by hotels now account for more than 32% of overall income, according to AHLA.

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As more hotel guests turn to artificial intelligence to improve their travel experience, reserving hotels straight through large language models (LLMs) may be next, hospitality specialists said. Agentic commerce a procedure by which autonomous AI representatives act upon behalf of a consumer to find, compare and complete purchases is a trend that has sped up throughout industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're likely to use AI for travel suggestions. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct booking, bigger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and change the method the consumer searches," Kletzel stated.

"If you are not visible in an LLM search results page which many brand names aren't, and this is the big panic that they're all going through right now customers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI client experience platform Talkdesk, likewise informed Hotel Dive that hospitality players require to guarantee their property information is being indexed by LLMs to appear in traveler questions.