Why Fast Casual Market Value Is Surging

Listen to the short article 17 minutes This audio is auto-generated. Please let us know if you have feedback. Following a year of broad economic unpredictability that stifled growth for hotels, hospitality industry leaders are looking towards 2026 with cautious optimism. Increasing 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 all of it, hotel business are anticipated to fortify their portfolios with brand-new brand offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from differing corners of the industry about their 2026 predictions. Below are the top patterns expected to effect hotel operations, efficiency, net unit growth and more this year.

Overall wages, salaries 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 up to $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, increasing labor expenses posture a difficulty to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright concern." Increasing labor expenses have been an obstacle for hoteliers for years, Davis said, especially following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in total operating revenue, according to AHLA. In current years, countless union hotel employees have actually gone on strike requiring higher earnings in order to keep up with the rising expense of living in places such as California, Hawaii and Las Vegas.

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 Hotel and Gaming Trades Council's union agreement with the Hotel Association of New York City is set to end in July.

In 2015, the union backed New York City's freshly elected Mayor Zorhan Mamdani, who operated on a promise to raise New york city City's minimum wage to $30 per hour by 2030. Hotel industry associations, consisting of AHLA, have actually denounced comparable legislation throughout the country, consisting of the recently passed $30 wage regulation in Los Angeles. "Demand has not kept up with this rate," she stated. Incomes, wages and payroll-related expenses paid by hotels now account for more than 32% of total earnings, according to AHLA.

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As more hotel guests turn to artificial intelligence to improve their travel experience, reserving hotels straight through big language designs (LLMs) might be next, hospitality experts stated. Agentic commerce a procedure by which self-governing AI agents act on behalf of a customer 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 said they're likely to use AI for travel suggestions. A smaller percentage (57%) stated they 'd be likely to utilize it for scheduling travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The variety of customers that are searching [via LLMs] for product or services in travel has swollen in the last 12 months and is speeding up every day," Kletzel said, adding that undoubtedly, hotels will "take a hard take a look at how they can make it possible for commerce and deals through agentic [AI]"" [Brands] can construct on the trust they currently have if they do a fantastic job with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay 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 customer searches," Kletzel stated.

"If you are not visible in an LLM search results page which many brands aren't, and this is the big 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 item marketing at AI consumer experience platform Talkdesk, likewise informed Hotel Dive that hospitality gamers require to ensure their property details is being indexed by LLMs to appear in traveler questions.