Key Regional Shifts in Brand Development

, hospitality industry leaders are looking towards 2026 with mindful optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier segments might struggle amid a growing wealth bifurcation.

And through it all, hotel companies are expected to fortify their portfolios with brand-new brand offerings and partnerships. As the year gets underway, Hotel Dive talked to hospitality leaders from varying corners of the market about their 2026 predictions. Below are the top patterns expected to impact hotel operations, performance, net system growth and more this year.

Total wages, salaries and benefits paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is forecasted to climb to $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, increasing labor expenses pose a challenge 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 said, particularly 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 income, 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 City, where the New York Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City City is set to expire in July.

In 2015, the union backed New York City's newly elected Mayor Zorhan Mamdani, who ran on a promise to raise New York City's minimum wage to $30 per hour by 2030. Hotel industry associations, including AHLA, have actually knocked comparable legislation across the nation, consisting of the just recently passed $30 wage ordinance in Los Angeles. "Demand has actually not kept up with this pace," she stated. Incomes, incomes and payroll-related expenses paid by hotels now account for more than 32% of overall revenue, according to AHLA.

Targeting High-ROI Business Ventures in 2026

As more hotel guests turn to expert system to boost their travel experience, reserving hotels straight through large language models (LLMs) might be next, hospitality professionals stated. Agentic commerce a procedure by which autonomous AI representatives act upon behalf of a consumer to discover, compare and complete purchases is a trend that has sped up across markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're most likely to use AI for travel recommendations. A smaller sized percentage (57%) said they 'd be most likely to use it for booking travel. But that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The variety of consumers that are browsing [by means of LLMs] for products and services in travel has swollen in the last 12 months and is speeding up every day," Kletzel stated, including that inevitably, hotels will "take a difficult look at how they can enable commerce and deals through agentic [AI]"" [Brands] can develop on the trust they currently have if they do a great task with how they deal with AI in 2026." 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 sites and mobile apps, and alter the way the customer searches," Kletzel said.

"If you are not visible in an LLM search result which numerous brands aren't, and this is the big panic that they're all going through right now consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI customer experience platform Talkdesk, likewise informed Hotel Dive that hospitality gamers require to guarantee their residential or commercial property details is being indexed by LLMs to appear in traveler inquiries.