Expert Ways to Increase Brand Presence via Expansion

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 suppressed development for hotels, hospitality industry leaders are looking toward 2026 with mindful optimism. Increasing functional costs are slated to challenge owners this year and lower-tier sectors could struggle amidst a growing wealth bifurcation.

And through it all, hotel business are expected to strengthen 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, performance, net unit development and more this year.

Overall wages, salaries and advantages paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is predicted to reach $131 billion, representing a roughly 3% year-over-year increase, per AHLA. For hotel owners, rising labor expenses present an obstacle to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

How to Scale Your Hospitality Brand Rapidly

"It is an absolute issue." Rising labor expenses have actually been an obstacle for hoteliers for many years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor costs have increased 15.3% from 2019 to 2025, outmatching the 12.8% growth in total operating revenue, according to AHLA. In recent years, countless union hotel workers have actually gone on strike requiring higher wages in order to stay up to date with the increasing expense of living in locations such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis noted, union negotiations will be "front and center" in New york city City, where the New York Hotel and Video gaming Trades Council's union contract with the Hotel Association of New York City is set to end in July.

Last year, the union backed New York City's freshly elected Mayor Zorhan Mamdani, who ran on a promise to raise New york city City's minimum wage to $30 per hour by 2030. Hotel market associations, consisting of AHLA, have knocked comparable legislation across the country, consisting of the just recently passed $30 wage ordinance in Los Angeles. "Need has actually not kept up with this speed," she said. Wages, salaries and payroll-related expenses paid by hotels now account for more than 32% of total revenue, according to AHLA.

Why Fast Casual Market Value Will Be Surging

As more hotel guests turn to expert system to enhance their travel experience, reserving hotels directly through big language designs (LLMs) might be next, hospitality professionals said. Agentic commerce a process by which self-governing AI agents act upon behalf of a consumer to discover, compare and complete purchases is a pattern that has accelerated throughout industries like retail.

Freddy's Frozen Custard & Steakburgers

According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're likely to use AI for travel recommendations. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. 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 sites and mobile apps, and change the method the consumer searches," Kletzel stated.

"If you are not visible in an LLM search results page which lots of brands aren't, and this is the huge panic that they're all going through today customers aren't going to consider you," he stated. 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 details is being indexed by LLMs to appear in tourist inquiries.