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, hospitality industry leaders are looking towards 2026 with mindful optimism. Rising functional expenses are slated to challenge owners this year and lower-tier segments could have a hard time 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 industry about their 2026 predictions. Below are the leading patterns expected to effect hotel operations, performance, net system development and more this year.

Total wages, incomes and benefits paid by U.S. hotels increased to $127 billion in 2025, according to information from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is projected to climb up to $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, increasing labor costs posture a difficulty to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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Rising labor expenses have actually been a challenge for hoteliers for years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor expenses have actually increased 15.3% from 2019 to 2025, surpassing the 12.8% growth in overall operating earnings, according to AHLA.

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

"Need has actually not kept up with this speed," she stated. Wages, salaries and payroll-related costs 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 artificial intelligence to boost their travel experience, booking hotels straight through big language models (LLMs) might be next, hospitality experts said. Agentic commerce a procedure by which self-governing AI agents act upon behalf of a consumer to find, compare and finish purchases is a pattern that has accelerated across industries like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're likely to use AI for travel recommendations. A smaller sized percentage (57%) stated they 'd be likely to utilize it for scheduling travel. But that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of consumers that are searching [via LLMs] for items and services in travel has ballooned in the last 12 months and is speeding up every day," Kletzel said, including that undoubtedly, hotels will "take a hard take a look at how they can allow commerce and transactions through agentic [AI]"" [Brands] can build on the trust they currently have if they do an excellent task 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, 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 discoverable in an LLM search result 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 product marketing at AI customer experience platform Talkdesk, likewise informed Hotel Dive that hospitality gamers require to guarantee their property information is being indexed by LLMs to appear in traveler questions.