Analyzing Fast Casual Market Growth Trends for 2026

Listen to the short article 17 minutes This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad financial uncertainty that stifled growth for hotels, hospitality market leaders are looking towards 2026 with mindful optimism. Rising operational expenses are slated to challenge owners this year and lower-tier sections could struggle in the middle of a growing wealth bifurcation.

And through everything, hotel companies are anticipated 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 industry about their 2026 predictions. Below are the leading trends anticipated to impact hotel operations, performance, net system growth 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 forecasted 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 earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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Rising labor costs have been a difficulty for hoteliers for years, Davis said, especially following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, outpacing the 12.8% development in total operating profits, according to AHLA.

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

Last year, the union backed New York City's recently elected Mayor Zorhan Mamdani, who worked on a guarantee to raise New york city City's minimum wage to $30 per hour by 2030. Hotel market associations, consisting of AHLA, have knocked comparable legislation across the country, including the just recently passed $30 wage regulation in Los Angeles. "Demand has actually not kept up with this speed," she said. Wages, salaries and payroll-related expenses paid by hotels now account for more than 32% of overall profits, according to AHLA.

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As more hotel guests turn to synthetic intelligence to improve their travel experience, scheduling hotels directly through big language models (LLMs) might be next, hospitality professionals said. Agentic commerce a procedure by which self-governing AI representatives act upon behalf of a customer to discover, compare and complete purchases is a trend that has sped up throughout markets 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 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 reservation, bigger multibrand hotel companies will "embed LLMs into their own brand name sites and mobile apps, and alter the method the consumer searches," Kletzel stated.

"If you are not visible in an LLM search result which many brands aren't, and this is the big panic that they're all going through right now consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality product marketing at AI client experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers require to ensure their property info is being indexed by LLMs to appear in traveler inquiries.