Comparing Top Franchise Models for Growth

, hospitality market leaders are looking towards 2026 with careful optimism. Increasing operational costs are slated to challenge owners this year and lower-tier segments might have a hard time amidst a growing wealth bifurcation.

And through all of it, hotel companies are expected to fortify their portfolios with new brand offerings and partnerships. As the year gets underway, Hotel Dive spoke to hospitality leaders from varying corners of the industry about their 2026 predictions. Below are the top trends expected to effect hotel operations, performance, net system development and more this year.

Overall salaries, earnings and benefits paid by U.S. hotels increased to $127 billion in 2025, according to data from the American Hotel & Lodging Association, shared with Hotel Dive. In 2026, that figure is projected to climb to $131 billion, representing an approximately 3% year-over-year boost, per AHLA. For hotel owners, increasing labor costs pose an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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Increasing labor expenses have actually been a challenge for hoteliers for years, Davis said, especially following the COVID-19 pandemic. Overall, hotel labor expenses have increased 15.3% from 2019 to 2025, surpassing the 12.8% growth in total operating profits, according to AHLA.

3, 2024 in San Francisco, California. Justin Sullivan via Getty Images In 2026, Davis kept in mind, union negotiations will be "front and center" in New York City, where the New York City Hotel and Gaming Trades Council's union agreement with the Hotel Association of New York City City is set to expire in July.

"Demand has not stayed up to date with this pace," she stated. "We're likewise seeing these challenges intensified by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City City Safe Hotels Act. When need is falling and expenses are skyrocketing, the mathematics merely doesn't accumulate." Salaries, wages and payroll-related costs paid by hotels now account for more than 32% of total revenue, according to AHLA.

Will Fast Casual Franchises Be Lucrative in 2026?

As more hotel visitors turn to expert system to enhance their travel experience, booking hotels straight through big language designs (LLMs) might be next, hospitality professionals said. Agentic commerce a procedure by which self-governing AI representatives act on behalf of a consumer to find, compare and complete purchases is a pattern that has actually 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 utilize AI for travel recommendations. A smaller percentage (57%) stated they 'd be likely to use it for booking travel. However that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. "The number of customers that are searching [through LLMs] for services and products in travel has actually swollen in the last 12 months and is accelerating every day," Kletzel said, adding that inevitably, hotels will "take a hard 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 terrific job 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 reservation, larger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and change the method 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 consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality product marketing at AI client experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers require to guarantee their residential or commercial property information is being indexed by LLMs to appear in traveler questions.