Smart Methods to Boost Brand Presence via Expansion

Listen to the article 17 min This audio is auto-generated. Please let us know if you have feedback. Following a year of broad financial unpredictability that suppressed development for hotels, hospitality industry leaders are looking towards 2026 with careful optimism. Increasing functional expenses are slated to challenge owners this year and lower-tier sections could have a hard time amid a growing wealth bifurcation.

And through it all, hotel business are anticipated to fortify their portfolios with brand-new brand offerings and partnerships. As the year gets underway, Hotel Dive consulted with hospitality leaders from differing corners of the industry about their 2026 forecasts. Below are the top patterns anticipated to impact hotel operations, performance, net unit growth and more this year.

Total incomes, wages and advantages paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shared with Hotel Dive. In 2026, that figure is projected to climb to $131 billion, representing an approximately 3% year-over-year increase, per AHLA. For hotel owners, increasing labor costs pose an obstacle to net operating income development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

Top Lucrative Franchise Prospects for the Future

"It is an absolute concern." Rising labor expenses have actually been a challenge for hoteliers for several years, Davis stated, particularly following the COVID-19 pandemic. In general, hotel labor expenses have increased 15.3% from 2019 to 2025, outmatching the 12.8% development in overall operating revenue, according to AHLA. In current years, thousands of union hotel workers have actually gone on strike requiring greater wages in order to keep up with the increasing cost of living in places such as California, Hawaii and Las Vegas.

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

"Demand has not stayed up to date with this pace," she said. "We're likewise seeing these difficulties compounded 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 costs are soaring, the math simply doesn't build up." Salaries, incomes and payroll-related expenses paid by hotels now represent more than 32% of total profits, according to AHLA.

Smart Ways to Boost Brand Share via Expansion

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 process by which self-governing AI agents act upon behalf of a customer to find, compare and complete purchases is a pattern that has actually sped up across markets like retail.

Freddy's Frozen Custard & Steakburgers

According to PwC's 2025 Holiday Outlook report, 76% of millennials stated they're most likely to use AI for travel suggestions. A smaller percentage (57%) stated they 'd be likely to utilize it for booking travel. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The variety of consumers that are browsing [via LLMs] for product or services in travel has actually swollen in the last 12 months and is speeding up every day," Kletzel said, including that inevitably, hotels will "take a hard take a look at how they can enable commerce and deals through agentic [AI]"" [Brands] can build on the trust they currently have if they do a great job with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct reservation, bigger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and alter the way 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 big panic that they're all going through right now consumers aren't going to consider you," he said. Michael Klein, head of retail, travel and hospitality item marketing at AI customer experience platform Talkdesk, likewise informed Hotel Dive that hospitality gamers need to ensure their property details is being indexed by LLMs to appear in tourist inquiries.