Can Fast Casual Investments Remain Lucrative in 2026?

Listen to the post 17 min This audio is auto-generated. Please let us know if you have feedback. Following a year of broad financial unpredictability that suppressed growth for hotels, hospitality industry leaders are looking toward 2026 with mindful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier segments could struggle amidst a growing wealth bifurcation.

And through all of it, hotel business are anticipated to fortify their portfolios with brand-new brand offerings and partnerships. As the year gets underway, Hotel Dive talked to hospitality leaders from differing corners of the industry about their 2026 predictions. Below are the leading trends anticipated to effect hotel operations, performance, net system growth and more this year.

Overall salaries, salaries and advantages 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 predicted to climb to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, rising labor expenses posture a challenge to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

Top Profitable Franchise Opportunities for the Future

Increasing labor costs have actually been a difficulty 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 overall operating earnings, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan through Getty Images In 2026, Davis noted, 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 end in July.

"Need has actually not kept up with this rate," she stated. "We're likewise seeing these obstacles intensified by legislation that targets hotel operations, such as severe labor and licensing policies like the New York City City Safe Hotels Act. When demand is falling and expenses are soaring, the math merely does not build up." Wages, salaries and payroll-related expenditures paid by hotels now represent more than 32% of overall earnings, according to AHLA.

Identifying Profitable Business Investments in 2026

As more hotel guests turn to expert system to improve their travel experience, reserving hotels directly through big language designs (LLMs) might be next, hospitality experts said. Agentic commerce a procedure by which autonomous AI agents act on behalf of a customer to discover, compare and complete purchases is a trend that has actually accelerated across industries like retail.

Freddy's Frozen Custard & Steakburgers

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, transportation and logistics leader, informed Hotel Dive. Michael Klein Head of retail, travel and hospitality product 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 change the method the customer searches," Kletzel stated.

"If you are not discoverable in an LLM search result which numerous brand names aren't, and this is the huge panic that they're all going through today consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI client experience platform Talkdesk, likewise told Hotel Dive that hospitality gamers require to ensure their home information is being indexed by LLMs to appear in traveler queries.