AI Reshaping Hotel Bookings
Hotels are entering the "Ask and Book" era as AI fundamentally reshapes travel, according to a new analysis from NYU and BCG. The study finds 37% of travelers already use AI language models on travel sites to plan trips, a trend that's changing how online travel agencies price and recommend hotels.
The shift to conversational AI is not just about convenience; it's a direct assault on the long-standing commission model of Online Travel Agencies (OTAs). While OTAs charge hotels 15%-30% for bookings, AI-driven recommendations are creating a new marketplace where visibility is paramount. Hotels are now competing for a spot in a traveler's AI-generated shortlist, a fundamental change from optimizing for placement on a search results page. Major hotel chains are already deploying AI to personalize guest experiences and streamline operations. Hilton's AI concierge, "Connie," assists guests with information and recommendations, while Hyatt has implemented AI to handle millions of annual calls, saving over $4 million yearly. Similarly, Wyndham Hotels & Resorts uses AI for property messaging, allowing guests to text for information, which frees up staff for more complex tasks. This automation is critical as 65% of North American hotels reported staffing shortages in 2025. AI's impact extends to the core of hotel profitability: revenue management. Hotels using AI for dynamic pricing have reported a 5-10% higher growth in Revenue Per Available Room (RevPAR) compared to those using static methods. AI algorithms analyze millions of data points in real-time—including competitor rates, local events, and even weather forecasts—to improve forecasting accuracy by up to 20%. This technological arms race is also evident among the major OTAs. Both Expedia and Booking.com have launched AI-powered trip-planning chatbots. Expedia's "Romie" assists with group trip planning, while Booking.com has integrated its services with ChatGPT to provide conversational recommendations. These moves are designed to capture travelers at the very beginning of their planning process, making the OTAs the gatekeepers of the new "Ask and Book" ecosystem. The next frontier is "agentic AI," which can act autonomously to make decisions and accomplish goals with minimal human input. Startups like Mindtrip and Navan are developing AI that can craft complex itineraries from simple text prompts and even automatically book all components of a trip. This evolution points to a future where your AI assistant won't just suggest a trip but will find a price drop, book the flight and hotel, and manage your entire itinerary. This shift is creating a significant skills gap in the hospitality industry. Only 2.9% of full-time travel and tourism employees possess AI skills, compared to 21% in the tech and media sectors. To stay competitive, hotels will need to invest not only in technology but also in retraining their workforce to collaborate with these new AI "co-pilots."
