Identifying Profitable Business Investments in 2026

Listen to the short article 17 minutes This audio is auto-generated. Please let us understand if you have feedback. Following a year of broad economic uncertainty that stifled growth for hotels, hospitality market leaders are looking toward 2026 with careful optimism. Rising functional costs are slated to challenge owners this year and lower-tier segments could struggle amidst a growing wealth bifurcation.

And through everything, hotel companies are anticipated to fortify their portfolios with brand-new brand offerings and collaborations. As the year gets underway, Hotel Dive consulted with hospitality leaders from differing corners of the industry about their 2026 predictions. Below are the leading trends expected to impact hotel operations, performance, net unit growth and more this year.

Total incomes, wages 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 reach $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, rising labor costs position a difficulty to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

Modern Hospitality Market Innovations Driving Future Success

"It is an outright issue." Rising labor expenses have actually been an obstacle for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor expenses have actually increased 15.3% from 2019 to 2025, surpassing the 12.8% development in overall operating earnings, according to AHLA. Over the last few years, thousands of union hotel workers have gone on strike demanding higher earnings in order to stay up to date 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 contract with the Hotel Association of New York City is set to expire in July.

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

The Outlook of Global Brand Growth Strategies

As more hotel visitors turn to synthetic intelligence to enhance their travel experience, scheduling hotels directly through large language models (LLMs) may be next, hospitality experts stated. Agentic commerce a procedure by which autonomous AI agents act upon behalf of a customer to discover, compare and finish purchases is a pattern that has actually accelerated across industries like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials stated they're most likely to use AI for travel suggestions. A smaller portion (57%) said they 'd be likely to utilize it for scheduling travel. However that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The number of customers that are searching [via LLMs] for services and products in travel has actually ballooned in the last 12 months and is speeding up every day," Kletzel said, including that undoubtedly, hotels will "take a difficult look at how they can enable commerce and transactions through agentic [AI]"" [Brands] can develop on the trust they already have if they do a terrific job with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To stay competitive with direct reservation, bigger multibrand hotel business will "embed LLMs into their own brand sites and mobile apps, and alter the method the customer searches," Kletzel said.

"If you are not visible in an LLM search result which many brands aren't, and this is the big panic that they're all going through right now consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality product marketing at AI client experience platform Talkdesk, similarly told Hotel Dive that hospitality players need to ensure their property details is being indexed by LLMs to appear in traveler queries.