Major Global Shifts in Brand Expansion

, hospitality industry leaders are looking towards 2026 with mindful optimism. Increasing functional costs are slated to challenge owners this year and lower-tier segments could have a hard time in the middle of a growing wealth bifurcation.

And through all of it, hotel business are anticipated to fortify their portfolios with new brand name offerings and collaborations. As the year gets underway, Hotel Dive spoke to hospitality leaders from differing corners of the market about their 2026 predictions. Below are the top patterns anticipated to impact hotel operations, performance, net unit development and more this year.

Total incomes, earnings and advantages paid by U.S. hotels rose 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 reach $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, rising labor expenses present a difficulty to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright concern." Rising labor expenses have been a challenge for hoteliers for many years, Davis said, especially following the COVID-19 pandemic. In general, hotel labor costs have actually increased 15.3% from 2019 to 2025, surpassing the 12.8% development in total operating profits, according to AHLA. Recently, thousands of union hotel employees have actually gone on strike requiring greater wages in order to stay up to date with the rising cost of living in locations such as California, Hawaii and Las Vegas.

3, 2024 in San Francisco, California. Justin Sullivan by means of 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 City is set to end in July.

In 2015, the union backed New york city City's recently elected Mayor Zorhan Mamdani, who operated on a pledge to raise New york city City's minimum wage to $30 per hour by 2030. Hotel market associations, including AHLA, have knocked comparable legislation across the nation, including the just recently passed $30 wage regulation in Los Angeles. "Need has actually not kept up with this rate," she said. Wages, incomes and payroll-related expenditures paid by hotels now account for more than 32% of overall profits, according to AHLA.

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As more hotel visitors turn to expert system to improve their travel experience, reserving hotels directly through large language designs (LLMs) may be next, hospitality specialists said. Agentic commerce a procedure by which self-governing AI agents act upon behalf of a customer to find, compare and finish purchases is a pattern that has accelerated throughout markets 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 sized percentage (57%) stated they 'd be most likely to use it for scheduling travel. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The variety of customers that are browsing [through LLMs] for services and products in travel has actually swollen in the last 12 months and is accelerating every day," Kletzel stated, adding that inevitably, hotels will "take a difficult look at how they can make it possible for commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they currently have if they do an excellent job with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, bigger multibrand hotel companies will "embed LLMs into their own brand name websites and mobile apps, and change the method the customer searches," Kletzel said.

"If you are not discoverable in an LLM search engine 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 stated. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, similarly told Hotel Dive that hospitality gamers need to ensure their residential or commercial property details is being indexed by LLMs to appear in traveler queries.