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, hospitality market leaders are looking towards 2026 with cautious optimism. Rising functional expenses are slated to challenge owners this year and lower-tier sectors could struggle amidst a growing wealth bifurcation.

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

Overall incomes, earnings and advantages paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is forecasted to climb to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, increasing labor costs present a challenge 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." Rising labor costs have actually been a challenge for hoteliers for several years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, outpacing the 12.8% development in overall operating revenue, according to AHLA. Over the last few years, countless union hotel employees have actually gone on strike demanding higher wages in order to stay up to date with the increasing cost of living in places such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis kept in mind, union negotiations will be "front and center" in New York 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 City's newly chosen Mayor Zorhan Mamdani, who worked on a pledge to raise New York City's base pay to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have knocked similar legislation throughout the country, including the just recently passed $30 wage regulation in Los Angeles. "Need has not kept up with this pace," she said. Incomes, incomes 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 guests turn to expert system to enhance their travel experience, reserving hotels straight through big language models (LLMs) may be next, hospitality specialists stated. Agentic commerce a procedure by which autonomous AI agents act on behalf of a consumer to discover, compare and complete purchases is a pattern that has sped up throughout markets 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. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct booking, larger multibrand hotel companies will "embed LLMs into their own brand name sites and mobile apps, and change the method the consumer searches," Kletzel said.

"If you are not visible in an LLM search results page which many brands 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 item marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers require to guarantee their property info is being indexed by LLMs to appear in tourist queries.