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, hospitality industry leaders are looking toward 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 all of it, hotel business are expected to fortify their portfolios with new brand name offerings and partnerships. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying 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.

Total 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 projected to climb to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, rising labor expenses posture an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

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Increasing labor costs have actually been a challenge for hoteliers for years, Davis said, especially following the COVID-19 pandemic. In general, hotel labor costs have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in overall operating income, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan through Getty Images In 2026, Davis kept in mind, union negotiations 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 City's recently elected Mayor Zorhan Mamdani, who worked on a pledge to raise New york city City's minimum wage to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have denounced similar legislation throughout the country, consisting of the just recently passed $30 wage ordinance in Los Angeles. "Demand has actually not kept up with this speed," she stated. Salaries, wages 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 expert system to enhance their travel experience, scheduling hotels straight through big language designs (LLMs) may be next, hospitality specialists said. Agentic commerce a process by which self-governing AI representatives act on behalf of a customer to find, compare and finish purchases is a trend that has accelerated throughout 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 suggestions. A smaller portion (57%) said they 'd be likely to use it for reserving travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of customers that are browsing [via LLMs] for services and products in travel has actually ballooned in the last 12 months and is accelerating every day," Kletzel stated, adding that inevitably, hotels will "take a tough take a look at how they can allow commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they currently have if they do a fantastic 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, bigger multibrand hotel business will "embed LLMs into their own brand name sites and mobile apps, and alter the way the consumer searches," Kletzel stated.

"If you are not discoverable in an LLM search engine 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 players need to ensure their property information is being indexed by LLMs to appear in traveler inquiries.