How to Grow Your Hospitality Group Efficiently

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 industry leaders are looking towards 2026 with cautious optimism. Rising operational costs are slated to challenge owners this year and lower-tier segments could have a hard time amidst a growing wealth bifurcation.

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

Total incomes, salaries and advantages paid by U.S. hotels rose to $127 billion in 2025, according to data from the American Hotel & Accommodations Association, shown Hotel Dive. In 2026, that figure is predicted to climb to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, increasing labor costs present an obstacle to net operating income growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, told Hotel Dive.

Comparing Top Franchise Schemes for 2026

"It is an absolute issue." Rising labor costs have been a difficulty for hoteliers for many 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% growth in total operating revenue, according to AHLA. Recently, thousands of union hotel employees have actually gone on strike requiring greater earnings in order to keep up with the increasing 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, where the New York City Hotel and Video gaming Trades Council's union agreement with the Hotel Association of New York City is set to expire in July.

"Need has actually not stayed up to date with this pace," she said. "We're also seeing these obstacles intensified by legislation that targets hotel operations, such as extreme labor and licensing policies like the New York City City Safe Hotels Act. When demand is falling and expenses are soaring, the math simply does not include up." Salaries, salaries and payroll-related expenses paid by hotels now account for more than 32% of overall revenue, according to AHLA.

The Outlook of 2026 Corporate Growth Milestones

As more hotel guests turn to expert system to boost their travel experience, booking hotels directly through large language models (LLMs) might be next, hospitality experts stated. Agentic commerce a procedure by which self-governing AI agents act on behalf of a customer to find, compare and complete purchases is a trend that has actually sped up across markets like retail.

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According to PwC's 2025 Vacation Outlook report, 76% of millennials said they're likely to utilize AI for travel recommendations. A smaller portion (57%) stated they 'd be likely to utilize it for booking travel. But that number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, informed Hotel Dive. "The number of consumers that are browsing [by means of LLMs] for items and services in travel has ballooned in the last 12 months and is speeding up every day," Kletzel said, adding that undoubtedly, hotels will "take a difficult appearance at how they can enable commerce and deals through agentic [AI]"" [Brands] can construct on the trust they currently have if they do a fantastic job with how they handle AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct booking, larger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and change the method the consumer searches," Kletzel said.

"If you are not discoverable in an LLM search engine result 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 said. Michael Klein, head of retail, travel and hospitality product marketing at AI client experience platform Talkdesk, similarly told Hotel Dive that hospitality players require to guarantee their property information is being indexed by LLMs to appear in traveler queries.