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, hospitality industry leaders are looking towards 2026 with mindful optimism. Rising functional costs are slated to challenge owners this year and lower-tier segments could have a hard time amid a growing wealth bifurcation.

And through everything, hotel business are expected to strengthen their portfolios with new brand offerings and collaborations. As the year gets underway, Hotel Dive talked to hospitality leaders from varying corners of the market about their 2026 predictions. Below are the top patterns expected to effect hotel operations, performance, net unit 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 & Accommodations 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 costs position an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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Rising labor costs have actually been a difficulty for hoteliers for years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in total operating earnings, according to AHLA.

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

"Need has actually not kept up with this pace," 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 Safe Hotels Act. When need is falling and expenses are skyrocketing, the mathematics simply doesn't add up." Salaries, earnings and payroll-related expenditures paid by hotels now represent more than 32% of overall income, according to AHLA.

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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 autonomous AI representatives act on behalf of a customer to discover, 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 said they're most likely to utilize 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 business will "embed LLMs into their own brand name sites and mobile apps, and change 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 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, similarly told Hotel Dive that hospitality gamers need to ensure their property information is being indexed by LLMs to appear in traveler questions.