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

And through everything, hotel companies are expected to strengthen their portfolios with brand-new brand offerings and partnerships. As the year gets underway, Hotel Dive talked with hospitality leaders from varying corners of the market about their 2026 forecasts. Below are the top trends anticipated to impact hotel operations, performance, net unit growth and more this year.

Total salaries, wages and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is projected to climb up to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, rising labor expenses present a difficulty to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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"It is an outright concern." Increasing labor expenses have been an obstacle for hoteliers for several years, Davis stated, particularly following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in total operating revenue, according to AHLA. Recently, thousands of union hotel workers have gone on strike requiring higher wages in order to keep up with the rising expense of living in locations such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan by means of 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 contract with the Hotel Association of New York City City is set to end in July.

In 2015, the union backed New York City's newly elected Mayor Zorhan Mamdani, who worked on a pledge to raise New York City's minimum wage to $30 per hour by 2030. Hotel market associations, including AHLA, have actually knocked similar legislation throughout the country, including the just recently passed $30 wage ordinance in Los Angeles. "Demand has not kept up with this speed," she said. "We're likewise seeing these difficulties compounded by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City Safe Hotels Act. When need is falling and costs are skyrocketing, the math simply does not accumulate." Wages, incomes and payroll-related expenditures paid by hotels now account for more than 32% of overall profits, according to AHLA.

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As more hotel visitors turn to artificial intelligence to improve their travel experience, scheduling hotels directly through big language models (LLMs) might be next, hospitality experts said. Agentic commerce a process by which autonomous AI agents act upon behalf of a consumer to discover, compare and complete purchases is a pattern that has sped up across industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're likely to utilize AI for travel recommendations. A smaller portion (57%) said they 'd be most likely to utilize it for scheduling travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The variety of consumers that are browsing [through LLMs] for services and products in travel has swollen in the last 12 months and is speeding up every day," Kletzel said, including that inevitably, hotels will "take a hard 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 manage AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, bigger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and change the way the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result which many brand names aren't, and this is the huge panic that they're all going through right now consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI customer experience platform Talkdesk, similarly informed Hotel Dive that hospitality players need to ensure their home information is being indexed by LLMs to appear in tourist queries.