AI Is Changing How People Book Hotels
A new report from NYU and BCG finds that 37% of travelers already use AI language models on travel sites to plan and book trips. The analysis suggests the hotel industry is entering an "Ask and Book Era," where conversational AI reshapes discovery and distribution, challenging the dominance of traditional online travel agencies.
This shift to conversational search is already having a significant impact, with 40% of travelers globally reporting they used an AI-based tool for travel planning. The satisfaction rate among those who have used AI for trip planning is high, at 82%. For younger generations, the preference is even more pronounced, with 53% of Gen Z and 57% of Millennials now favoring AI-assisted travel planning. The move to an "Ask and Book Era" threatens the traditional online travel agency (OTA) model, which relies on search and scroll. Hotels pay steep commissions of 15%-30% to OTAs, but AI could disrupt this by providing recommendations directly to consumers. Major hotel chains like Hilton and Marriott have already identified AI platforms as a potential risk to their direct booking business. This new landscape presents a visibility crisis for many hotels. An analysis of 2.36 million data points found that only one-sixth of the 810,000 global hotel properties appear in AI search results. To compete, hotels will need to shift their focus from optimizing for web pages to optimizing for algorithmic relevance, ensuring their data is structured for AI interpretation. Beyond booking, AI is being integrated into hotel operations to address challenges like staffing shortages and rising labor costs. AI-powered chatbots can handle up to 80% of routine guest questions, freeing up staff for more complex issues. Internally, AI is used for dynamic pricing, with the potential to increase revenue per available room by 10%.
