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, hospitality market leaders are looking toward 2026 with mindful optimism. Rising operational costs are slated to challenge owners this year and lower-tier sectors could have a hard time amidst a growing wealth bifurcation.

And through everything, hotel business are anticipated to fortify their portfolios with new brand offerings and collaborations. As the year gets underway, Hotel Dive spoke to hospitality leaders from differing corners of the industry about their 2026 forecasts. Below are the top patterns expected to impact hotel operations, efficiency, net unit growth and more this year.

Overall salaries, incomes and benefits paid by U.S. hotels rose to $127 billion in 2025, according to information from the American Hotel & Lodging Association, shown Hotel Dive. In 2026, that figure is forecasted to climb to $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, rising labor expenses pose 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 absolute issue." Rising labor costs have actually been a challenge for hoteliers for several years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor expenses have increased 15.3% from 2019 to 2025, outpacing the 12.8% growth in overall operating revenue, according to AHLA. Over the last few years, thousands of union hotel employees have gone on strike requiring greater salaries 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 settlements will be "front and center" in New York City, where the New York Hotel and Gaming Trades Council's union agreement with the Hotel Association of New York City City is set to expire in July.

Last year, the union backed New york city City's newly elected Mayor Zorhan Mamdani, who operated on a promise to raise New York City's minimum wage to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have denounced similar legislation throughout the country, including the recently passed $30 wage regulation in Los Angeles. "Demand has actually not kept up with this pace," she stated. "We're also seeing these challenges intensified by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City City Safe Hotels Act. When need is falling and expenses are skyrocketing, the math simply doesn't build up." Wages, salaries and payroll-related expenditures paid by hotels now account for more than 32% of total income, according to AHLA.

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As more hotel guests turn to synthetic intelligence to boost their travel experience, reserving hotels directly through large language models (LLMs) may be next, hospitality experts said. Agentic commerce a process by which autonomous AI agents act on behalf of a consumer to discover, compare and finish purchases is a pattern that has accelerated throughout markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're most likely to utilize AI for travel recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct reservation, bigger multibrand hotel companies will "embed LLMs into their own brand sites and mobile apps, and change the method the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search results page which many brands aren't, and this is the huge panic that they're all going through right now 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, similarly informed Hotel Dive that hospitality gamers require to guarantee their home information is being indexed by LLMs to appear in tourist queries.