Identifying Profitable Hospitality Ventures in 2026

, hospitality market leaders are looking towards 2026 with mindful optimism. Increasing operational expenses are slated to challenge owners this year and lower-tier sectors might have a hard time amid a growing wealth bifurcation.

And through it all, hotel companies are anticipated to fortify their portfolios with new brand offerings and collaborations. As the year gets underway, Hotel Dive consulted with hospitality leaders from varying 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 benefits 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 up to $131 billion, representing a roughly 3% year-over-year boost, per AHLA. For hotel owners, increasing labor costs pose an obstacle to net operating earnings development, Kevin Davis, Americas CEO at JLL Hotels & Hospitality, informed Hotel Dive.

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"It is an outright issue." Increasing labor expenses have been a challenge for hoteliers for many years, Davis stated, especially following the COVID-19 pandemic. In general, hotel labor expenses have actually increased 15.3% from 2019 to 2025, surpassing the 12.8% growth in total operating earnings, according to AHLA. Over the last few years, thousands of union hotel workers have gone on strike demanding greater incomes in order to keep up with the rising cost 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 Video gaming Trades Council's union contract with the Hotel Association of New York City City is set to expire in July.

Last year, the union backed New York City's newly elected Mayor Zorhan Mamdani, who operated on a pledge to raise New York City's base pay to $30 per hour by 2030. Hotel industry associations, including AHLA, have denounced comparable legislation across the nation, consisting of the recently passed $30 wage regulation in Los Angeles. "Demand has not kept up with this pace," she said. Salaries, salaries and payroll-related expenditures paid by hotels now account for more than 32% of total profits, according to AHLA.

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As more hotel guests turn to artificial intelligence to enhance their travel experience, scheduling hotels directly through large language designs (LLMs) may be next, hospitality specialists said. Agentic commerce a procedure by which autonomous AI representatives act on behalf of a consumer to discover, compare and complete purchases is a trend that has actually accelerated throughout markets like retail.

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According to PwC's 2025 Holiday Outlook report, 76% of millennials said they're likely to use AI for travel recommendations. A smaller percentage (57%) stated they 'd be most likely to use it for scheduling travel. However that number is growing, Jonathan Kletzel, PwC's travel, transportation and logistics leader, told Hotel Dive. "The number of customers that are searching [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 undoubtedly, hotels will "take a tough appearance at how they can allow commerce and deals through agentic [AI]"" [Brands] can build on the trust they currently have if they do an excellent task with how they deal with AI in 2026." Michael Klein Head of retail, travel and hospitality item marketing at Talkdesk To remain competitive with direct reservation, bigger 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 visible in an LLM search engine result which lots of brand names aren't, and this is the huge 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 product marketing at AI consumer experience platform Talkdesk, likewise informed Hotel Dive that hospitality gamers require to guarantee their property information is being indexed by LLMs to appear in tourist inquiries.