How to Scale a Hospitality Group Efficiently

Listen to the short article 17 minutes This audio is auto-generated. Please let us know if you have feedback. Following a year of broad economic unpredictability that suppressed growth for hotels, hospitality industry leaders are looking towards 2026 with careful 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 everything, hotel business are anticipated to fortify their portfolios with brand-new brand offerings and collaborations. As the year gets underway, Hotel Dive spoke with hospitality leaders from varying corners of the industry about their 2026 predictions. Below are the leading trends expected to effect hotel operations, efficiency, net unit development and more this year.

Total salaries, earnings and benefits 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 predicted to climb to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, increasing labor expenses pose an obstacle to net operating earnings growth, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright concern." Increasing labor expenses have been a challenge for hoteliers for years, Davis stated, especially following the COVID-19 pandemic. Overall, hotel labor costs have actually increased 15.3% from 2019 to 2025, exceeding the 12.8% growth in total operating earnings, according to AHLA. In current years, thousands of union hotel workers have actually gone on strike demanding higher 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 through 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 contract with the Hotel Association of New York City City is set to end in July.

"Demand has actually not stayed up to date with this rate," she stated. "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 expenses are skyrocketing, the math just doesn't add up." Wages, salaries and payroll-related expenses paid by hotels now represent more than 32% of total revenue, according to AHLA.

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As more hotel guests turn to artificial intelligence to improve their travel experience, reserving hotels directly through big language models (LLMs) may be next, hospitality experts stated. Agentic commerce a procedure by which autonomous AI representatives act on behalf of a consumer to find, compare and complete purchases is a pattern that has actually sped up 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 suggestions. A smaller sized portion (57%) said they 'd be likely to use it for reserving travel. That number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, informed Hotel Dive. "The number of consumers that are browsing [through LLMs] for product or services in travel has ballooned in the last 12 months and is accelerating every day," Kletzel said, adding that inevitably, hotels will "take a difficult appearance at how they can enable commerce and transactions through agentic [AI]"" [Brands] can construct on the trust they already have if they do an excellent job with how they manage AI in 2026." Michael Klein Head of retail, travel and hospitality product marketing at Talkdesk To remain competitive with direct reservation, larger multibrand hotel business will "embed LLMs into their own brand websites and mobile apps, and alter the method the consumer searches," Kletzel said.

"If you are not visible in an LLM search results page which numerous brand names aren't, and this is the big panic that they're all going through right now consumers aren't going to consider you," he stated. Michael Klein, head of retail, travel and hospitality product marketing at AI consumer experience platform Talkdesk, likewise informed Hotel Dive that hospitality gamers require to guarantee their residential or commercial property information is being indexed by LLMs to appear in traveler queries.