Will Fast Casual Franchises Remain Lucrative in 2026?

Listen to the article 17 minutes This audio is auto-generated. Please let us know if you have feedback. Following a year of broad economic unpredictability that stifled development for hotels, hospitality industry leaders are looking towards 2026 with cautious optimism. Rising functional costs are slated to challenge owners this year and lower-tier segments could struggle amidst a growing wealth bifurcation.

And through all of it, hotel companies are anticipated to fortify their portfolios with brand-new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke to hospitality leaders from differing corners of the market about their 2026 forecasts. Below are the top trends expected to impact hotel operations, efficiency, net system development and more this year.

Overall salaries, salaries and advantages paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is predicted to climb to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, rising labor costs present a challenge to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an absolute issue." Rising labor expenses have actually been an obstacle for hoteliers for many years, Davis said, particularly following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, exceeding the 12.8% development in total operating revenue, according to AHLA. In the last few years, thousands of union hotel workers have gone on strike requiring higher wages in order to stay up to date with the rising expense of living in locations such as California, Hawaii and Las Vegas.

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

"Demand has actually not kept up with this pace," she said. Wages, incomes and payroll-related expenses paid by hotels now account for more than 32% of total revenue, according to AHLA.

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As more hotel visitors turn to synthetic intelligence to boost their travel experience, reserving hotels directly through big language models (LLMs) might be next, hospitality professionals said. Agentic commerce a procedure by which autonomous AI agents act on behalf of a consumer to discover, compare and finish purchases is a trend that has actually accelerated throughout industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're 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 remain competitive with direct reservation, bigger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and change the method the customer searches," Kletzel stated.

"If you are not discoverable in an LLM search results page which numerous 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, similarly told Hotel Dive that hospitality players require to ensure their property info is being indexed by LLMs to appear in tourist questions.