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, hospitality market leaders are looking toward 2026 with cautious optimism. Rising functional costs are slated to challenge owners this year and lower-tier sections could struggle amid a growing wealth bifurcation.

And through it all, hotel companies are anticipated to fortify their portfolios with new brand offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from varying corners of the market about their 2026 predictions. Below are the leading patterns expected to effect hotel operations, efficiency, net unit development and more this year.

Overall wages, wages and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is forecasted to reach $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses posture a challenge to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an absolute issue." Increasing labor expenses have actually been an obstacle for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, surpassing the 12.8% growth in overall operating revenue, according to AHLA. Recently, thousands of union hotel employees have actually gone on strike demanding higher wages in order to stay up to date with the rising cost of living in locations such as California, Hawaii and Las Vegas.

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 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 speed," she said. Salaries, wages and payroll-related costs paid by hotels now account for more than 32% of total profits, according to AHLA.

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As more hotel visitors turn to artificial intelligence to improve their travel experience, reserving hotels straight through big language designs (LLMs) may be next, hospitality experts said. Agentic commerce a procedure by which self-governing AI agents act upon behalf of a consumer to discover, compare and finish purchases is a trend that has accelerated throughout markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're most likely to utilize AI for travel suggestions. A smaller sized percentage (57%) stated they 'd be most likely to utilize it for scheduling travel. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The variety of consumers that are searching [via LLMs] for products and services in travel has actually swollen in the last 12 months and is speeding up every day," Kletzel said, adding that inevitably, hotels will "take a hard take a look at how they can make it possible for commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they already have if they do a fantastic job with how they handle AI in 2026." 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 sites and mobile apps, and change the way the consumer searches," Kletzel stated.

"If you are not discoverable in an LLM search engine result which numerous brand names aren't, and this is the huge panic that they're all going through right now customers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality players need to guarantee their property information is being indexed by LLMs to appear in traveler inquiries.