How to Scale a Hospitality Group Rapidly

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

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

Total incomes, earnings and advantages paid by U.S. hotels rose to $127 billion in 2025, according to information 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 increase, per AHLA. For hotel owners, increasing labor expenses pose 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 absolute issue." Rising labor costs have actually been an obstacle for hoteliers for many years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor costs have increased 15.3% from 2019 to 2025, exceeding the 12.8% development in total operating earnings, according to AHLA. Over the last few years, countless union hotel employees have gone on strike requiring higher wages in order to keep up with the rising expense of living in locations such as California, Hawaii and Las Vegas.

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 City, where the New York Hotel and Gaming Trades Council's union contract with the Hotel Association of New York City City is set to end in July.

Last year, the union backed New york city City's newly 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 similar legislation across the nation, consisting of the recently passed $30 wage regulation in Los Angeles. "Demand has actually not kept up with this pace," she stated. Salaries, incomes and payroll-related costs paid by hotels now account for more than 32% of overall revenue, according to AHLA.

How to Grow Your Hospitality Brand Efficiently

As more hotel visitors turn to expert system to improve their travel experience, reserving hotels straight through big language designs (LLMs) might be next, hospitality specialists stated. Agentic commerce a process by which self-governing AI agents act upon behalf of a consumer to find, compare and finish purchases is a trend that has sped up across 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 suggestions. That number is growing, Jonathan Kletzel, PwC's travel, transport and logistics leader, told Hotel Dive. Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To stay competitive with direct booking, bigger multibrand hotel companies will "embed LLMs into their own brand websites and mobile apps, and change the method the customer searches," Kletzel stated.

"If you are not visible in an LLM search result which numerous brands aren't, and this is the huge panic that they're all going through right now customers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality item marketing at AI consumer experience platform Talkdesk, likewise told Hotel Dive that hospitality players require to guarantee their home information is being indexed by LLMs to appear in traveler inquiries.