Given the vicissitudes of the hospitality industry in 2025, it is a wise idea to go into 2026 acting more proactively than usual when developing next year’s budget, operations strategies, labor relations plans, and insurance protocols. If what’s in the budget and business plans is not reflective of what’s happening in the outside world with tariffs, policies, permits, and local and state laws revolving around bars and restaurant operation, it may be a recipe for trouble—even if your venue is generating a buzz for all of the right reasons.
And if you're planning new builds or new designs for 2026, become familiar with the permitting and licensing rules in your area.
“Coming into 2026, it's important that the management teams of [hospitality] entities realize there is no one solution for preparing for potential permitting and licensing issues,” says Krystle Fader, design manager/senior associate, DyeLot Interiors, whose recent projects include Wilder Lounge at Hotel De Novo, Tapestry Collection by Hilton. “Many factors influence the roadblocks that may lie ahead, [and they] differ from jurisdiction to jurisdiction. Even if a bar or restaurant has had previous success in one location, it will likely mean something very different elsewhere.”
Fader adds that zoning, land use, and entitlements need to be clearly identified and understood early, as rules vary in different states. This can affect hours of operation, density restrictions, and viability to the neighborhood impact and expectations. Understanding the local alcohol licensing regulations specific to your site and potential impact on a brand's concept and expected demographic is critical to have a handle on early. Researching code cycle changes and what is included in these updates could save the ownership headache that may otherwise come during surprises in later design phases.
“As 2026 is a big code cycle change year in many states, there will be updates to energy and sustainability-related guidelines that could have a big impact on food and beverage operations,” Fader continues. “Understanding these things proactively can help you prepare for potential restrictions that the design teams will need to solve for later down the line. Staying ahead of licensing and permitting issues is an ongoing operational practice and not just a one-time research task.”
Here are some additional insights from hospitality experts and managers offering suggestions, tips, and tricks to stay in step with industry developments that managers and owners will likely encounter in the coming year.
New Year, New Rules
Heading into 2026, Mike Bausch, owner of Andolini’s Pizza restaurants, consultant, and author of The Unsliced Restaurant System, stresses managers and owners need to stay up-to-date with regional and local changes in ordinances, laws, and license requirements. Bar managers and owners need to assume the rules will keep moving, and many things will fly under the radar if they are not paying attention. In states where beverage and food safety laws become increasingly complex, it may be a wise move to work with a licensing company, as it is cheaper to invest time in due diligence than be caught out of compliance.
“The national headlines always get attention, but the stuff that creates real problems usually comes from your own state,” cautions Bausch. “Beverage law shifts constantly, and in Oklahoma alone, we’ve had four major changes in the past few years: no beer samples allowed, then samples allowed only with specific training, then changes to that training, and now the responsibility is landing on the individual employee. Other states are dealing with similar under-the-radar moves, from new payment requirements to enforcement rule changes to adjustments in what counts as over-service."
Bausch suggests getting prepared for forthcoming changes by creating one clean list of every license and permit your restaurant or bar depends on, including an alcohol license, a food service permit (if you have one), fire and occupancy permits, sales tax, and standard business licenses. “Track each renewal date and anything else you hear about the changes,” he says. “Staying ahead is a lot easier than digging out of a violation. If you live in a state where beverage laws shift often, check quarterly instead of annually. Follow your state’s beverage enforcement emails and Facebook groups, join local hospitality groups, and don’t hesitate to bring in a licensing company if the workload gets heavy.”
Fellow consultant Izzy Kharasch, president of Hospitality Works, which has helped more than 700 restaurants, bars, hotels, and casinos navigate the ever-changing legal landscape, notes that the industry will be affected by the increase in minimum wage on a nationwide level. Restaurant owners and managers may also look to California, as the state will be implementing Unpaid Sick Leave, which will also include the Crime Victims Leave when a family member is the victim of certain crimes to attend judicial proceedings related to that crime; Pest Control Training for all employees; and rules that authorize the Labor Commissioner to investigate and issue a citation or file a civil action for gratuities unlawfully taken or withheld by the employer.
“Spend time researching all of the federal government’s changes that affect everyone, and then research your state programs that typically begin January 1 or July 1,” affirms Kharasch. “Take the time to understand the new laws and regulations and definitely call if you don’t. Implementing these programs incorrectly is typically worse than the regulation itself.
Charles Richardson, Food and Beverage Director at Double Eagle Hotel & Casino in Cripple Creek, Colorado, agrees that staying ahead of licensing and permitting issues can help prevent disruptions to operations. “The easiest way to start is by organizing all documents and their expiration dates in advance and creating a calendar with renewal dates for liquor licenses, health permits, and other required documents,” he says. “It is also a good idea to regularly monitor regulatory updates at both the state and local levels as new requirements can appear unexpectedly. The sooner you hear about them, the easier it is to adjust processes. It is also useful to run internal checks for safety and sanitary compliance from time to time.”
Paying attention to changes to state alcohol laws and monitoring environmental regulations in your area are also a must. Richardson points to SB24-231 passed in Colorado in 2024, with planned updates implemented in 2025-2026. He cites longer license extensions for some businesses and new landlord requirements. Denver’s local “Waste No More” law, with full implementation planned for 2026, requires restaurants and other businesses to set up separate collection and removal of recyclables and compost. A gradual rollout for expanding the list of regulated waste has already been approved, including setting up a recycling and compost collection contract in advance, adapting the kitchen, and training staff.
Simplify the Guess Work with Guest Preferences
Guest behaviors can be as unpredictable as the economy. Bausch notes that in 2025, what worked was keeping operations tight during normal service and only pushing events that actually paid off. What didn’t work was expecting late-night surges, and customer volume didn’t justify it.
“Going into 2026, we’re tightening scheduling based on real sales data, and making sure projections match,” Bausch says, from the owner's standpoint. “We are also building mid-week draws to smooth out the week, and cutting programs that don’t show a clear return. The fact is that your concept only works if it still matches the people who walk in. A big shift right now is the rise of non-alcoholic (NA) options—not the sugary stuff, but actual NA beers. Younger drinkers are into them because they want to socialize without the hangover. Older guests like them because they still enjoy the flavor but want to avoid the hangover that lasts three days instead of three hours after age 40. That one category alone can change who your bar appeals to.”
This underscores concepts age quietly, and lasting means adjusting loudly. Therefore, Bausch advises looking at your menu, the style, and the pace, and asking if it still matches the guest you want, or the guest you used to have.
“I believe there will be a continued increase in non-alcoholic and mocktail requests,” observes Fader. “While data out there shows the younger generations aren't drinking as much as the generations before them, [other generations] are also embracing the non-alcoholic scene. People want to have a good time in social environments without the pressure of beer, wine, and liquor being their only options. Dietary restrictions, whether personal choice or allergy-related, also play a huge role in the food and beverage choices that bar owners need to consider in today's market. Showing that you are considering many different walks of life in your establishment can help bring in new faces.”
Richardson also observes that younger guests are increasingly choosing non-alcoholic and “healthy” drinks, appreciate atmosphere and novelty, and enjoy interesting, shareable small plates. “Generation Z pays attention to design, music, and event formats and is willing to pay for signature mocktails with great presentation, high-quality ingredients, and a strong overall experience,” he says. “Local produce, eco-friendliness, and minimal plastic are also trending. They also value convenient online booking, active social media, and QR menus. If you want to stay competitive, you need to stay on top of these trends, honestly evaluate your concept, and update your menu and atmosphere without losing your establishment’s individuality.”
For those seeking higher tech solutions, suites like Oracle Restaurants can empower restaurant owners and management to iteratively improve menu engineering, according to Amber Trendell, Senior Director of Strategy, Oracle Restaurants.
“By scoring items based on contribution margin, prep complexity, and sales velocity, brands can identify candidates for removal, reformulation, or re-pricing,” she says. “Restaurants can also leverage cross-utilization, favoring multi-item utility in recipes to reduce dead stock and prep sprawl. Anonymous buyer card alias and loyalty data can be leveraged to better understand segment-specific feedback that enables operators to optimize offers or detect menu item fatigue.”
Is The Price Right?
Holding the line on pricing sounds good until you run the numbers. Bausch reminds owners and managers that with the rising labor, utilities, insurance, and product costs, most bars don’t have room to freeze prices. However, prices can be increased strategically without scaring guests off if the experience delivers. “Better presentation, tighter hospitality, more thoughtful execution, and make sure you build in upsells into the scripting,” he says. “These all make the price increase without sticker shock. Tier the menu so you keep value options while still giving people a reason to trade up to the experience items.”
Kharasch agrees that owners should be looking closely at current labor costs and current liquor costs, but the situation provides an incentive to create a plan to lower the overall costs.
“This means doing a better job of understanding each employee's productivity,” he details, also recommending owners and managers get more involved in the liquor program to assess whether or not theft, overpouring, or staff giving away too much product is affecting the bottom line. “Value is the keyword in this question. Customers understand that prices will rise, but they still need to see a value. One good way to do this is to bundle items. It may mean creating a ‘Martini Tasting’ menu item. Rather than just sell an individual martini, get smaller glasses and sell three small martinis for a slightly higher price. The value is clear, and the bar just made more money.”
Richardson believes that it is best to raise prices selectively, only where actual costs have increased, while keeping the most popular items affordable. As the end of the year is a good time to review what needs changing, reviewing a few key numbers to understand how financially healthy your business is can help identify weaknesses early, adjust menus, prices, and staffing schedules, and plan next year’s operations more effectively. He recommends checking what percentage of revenue goes to purchases and payroll, how much money is actually left after deducting costs, whether there is a stable cash flow, whether it is enough to cover monthly expenses, and pinpointing the minimum revenue you need to break even and make sure inventory is not overstocked.
“Flexibility and technology are key,” he says. “A well-planned menu and staffing schedule, along with training employees for multiple roles and to perform different tasks, helped us reduce losses and speed up service. We also noticed several complaints about the condition of the rooms, so we upgraded them. Since then, guests have been commenting on how much more comfortable their stay is now. In 2026, we plan to tighten inventory control and operational costs, support our team, and continue improving service quality.”
While Dean Woodhouse from Doubletree by Hilton operates his business out of the U.K., he proposes a formula that can be helpful on a universal scale: Cost of Goods % + Labor %, split weekly and daily, based on POS, payroll, and supplier invoices. The ideal solution should end up being less than 66% combined.
To ensure the formula works correctly, gross margin by category (draughts, wine, spirits, food), pour cost per item, and wastage/voids/discounts, from POS, and stock counts should be factored in. From there, pass on costs by offering various prices for similar options. For example, anchor the wine price with a house wine, and offer two other wines - one slightly more expensive and one double the price of the house wine. Communicate to customers that the value of your business comes with transparency about where ingredients are sourced or made (“locally sourced,” “made in house”) and offering bundles or offers like early bird menus.
Tuning into Tech Changes
As a manager, Richardson looks at technologies that forecast demand, manage inventory, and prevent food spoilage, as well as programs that help personalize guest offerings and automate routine tasks like ordering and scheduling. The tech Bausch cares most about are tools that give him a more human connection with customers.
“I use AI and automation to create smarter, more personalized marketing, text, and email workflows based on buying behavior, but the final message still comes in my voice,” says Bausch. “There is a lot of talk about AI that analyzes parts and inventory, but none of it matters unless you make real moves as a result of it. AI phone answering is very popular, and if the customer isn’t seeking white-glove service, go for it. Otherwise, use a human. Cost savings are not my main AI concern, because most operational pain is resolved by better revenue. Better revenue comes from better marketing done more often.”
Speaking of AI, Deputy, a leading workforce management platform, just released its new global workforce report, “Better Together,” which reveals that nearly half of foodservice workers are broadly satisfied with AI’s day-to-day benefits. However, these workers are far less confident about its long-term impact, with only 38% feeling optimistic about AI’s role in the future of food service, viewing it as a tool to simplify tasks like scheduling and inventory. They also overwhelmingly (97%) believe human empathy can’t be replaced, with 53% rejecting the idea that empathy can be automated.
With the advent of so many new platforms and technology types, keeping track of it all can be difficult for the staff and the guest.
From kiosks and mobile apps to drive-thru and in-store ordering, quick-service owners and managers are navigating mounting complexity as they seek to serve guests across multiple sales channels. This is compounded for franchised businesses by the presence of multiple POS solutions across their network, often the result of individual franchisee choices.
In 2026, Amber Trendell, senior director of Strategy for the Oracle Restaurants suite of programs, says that her company plans to continue to help operators consolidate fragmented technology–implemented or otherwise–onto a unified, cloud-native foundation, making AI and automation more scalable. “Our approach builds on existing strengths while standardizing disconnected systems,” she says. “Embedding AI in loyalty [plans] and removing any friction in the path to purchase with embedded payments are opportunities to elevate the customer experience."
“Labor” Intensives
“In 2026, labor costs will increase, so our strategy for Double Eagle Hotel & Casino is to retain a strong team, increase productivity, and plan budgets wisely,” says Richardson. “We prioritize motivating our existing employees, as turnover is typically more expensive than hiring. At the same time, we are optimizing schedules so every paid hour provides employees real value. We are implementing technologies that eliminate some routine tasks, allowing a smaller team to operate without sacrificing quality. We put a strong emphasis on training, believing that one well-trained employee is more effective than two weaker ones.”
Bausch believes that the numbers that matter most heading into 2026 are labor percentage, COGS, revenue per hour, average check, and all fixed costs. “These aren’t nice-to-know numbers,” he stresses. “They’re what tell you if your bar is healthy or drifting. I also rely on a 13-month P&L instead of a standard 12-month because it shows patterns and seasonality one would miss otherwise. Pull this data from your POS, accounting software, vendor invoices, and bank statements, so you’re looking at reality, not guesses. That means cash in and out, not just what the Point of sale says. If you don’t know these metrics cold, everything else you do is reactive.”
He adds that as the minimum wage conversation isn’t slowing down, the only real move is to build a team that stays. Accomplishing this means cross-training, real expectations, and a culture people want to stay in.
“You can’t compete on wages alone,” Bausch says. “Flexibility, clear roles, and job development matter just as if not more. And again, the most honest answer is that you fix staffing pressure by growing revenue. Better marketing drives more traffic. More traffic gives you more margin to pay people well without gutting operations. Cutting alone won’t get you there. You can’t save your way to prosperity.
Some software and tech solutions designed for staff and consumer-facing user experiences are optimized for the task at hand, whether that’s speed of service or maximizing basket size. According to Trendell, labor forecasts can be shaped against demand using both historical and real-time data to reduce overtime and last-minute call-ins.
Reassessing Insurance
Evaluating your venues’ insurance policy to see what coverages work best is another way to be prepared for changes in the next calendar year. Kharasch recommends making time following the summer and patio season, when restaurants have quieted down from the rush of summer and patio season, and they have a bit of room to breathe before the holiday buyouts and parties come in December. However, it is never too late to start.
“If restaurant owners have one, two, five hours in a week, or 10 hours over the next few weeks, [they should ask themselves] what is the best use of their time to ensure the longevity of the restaurant, especially heading into the winter season,” he advises.
Society Insurance, which has provided insurance to the hospitality industry for more than 120 years, provides a good breakdown on how to get ahead of increasing premiums and avoiding future lawsuits before they happen:
- One hour: Replace internal floor mats with curled-up edges before someone stumbles.
- Five hours: Prepare for icy season, including obtaining ice melt/salt early in the season, and identify areas that are subject to a freeze-and-thaw cycle. (Where is there a puddle at noon that could turn into a sheet of ice by 5:00 p.m.? These areas are hazardous and should be checked and salted more often.)
- Ten hours: Prevent freeze damage, including insulating exterior spigots, examining water lines, and sealing all exterior cracks.
“Insurance is already going up, and any policy change or regulatory shift nudges it higher,” cautions Bausch. “The real danger is what you don't actually have covered. Pay attention to how your policy defines service to intoxicated guests, what it covers for off-site or private events, what counts as a licensed operation, and how equipment breakdowns and spoilage are handled. With beer and spirits costs rising, spoilage matters more than people realize. And if you run a modern POS, make sure your cyber coverage is real, not something you think you have.”
Richardson observes rising prices in 2024-2025 have driven up commercial insurance costs, and there will likely see further increases in 2026. He cites higher equipment costs and salaries, which means higher potential losses in the event of accidents or breakdowns.
“I would ensure that coverage limits reflect current prices, check whether the policy covers alcohol-related risks, bar-related incidents, and beverage delivery, and check for any new exclusions that might cause a claim to be denied,” he says. “The easiest way is to review the policy with your insurance agent and update it if necessary to reflect current business realities.”
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