What's Happening?
Hotels are being encouraged to adopt AI technology to compete with Online Travel Agencies (OTAs) like Expedia and Booking.com, which have historically dominated new distribution channels such as metasearch and mobile. The article highlights that OTAs spend billions annually on marketing to intercept travelers early in their planning process. However, AI is changing the landscape, as travelers increasingly use AI interfaces for trip planning, reducing reliance on traditional search engines and OTA platforms. This shift presents an opportunity for hotels to establish a direct presence in AI platforms, potentially bypassing OTAs and reducing commission fees.
Why It's Important?
The integration of AI in travel planning represents a significant shift in how travelers
discover and book accommodations. For hotels, this offers a chance to regain control over guest relationships and reduce dependency on OTAs, which charge high commission fees. By establishing a presence in AI platforms, hotels can directly engage with travelers, offering personalized experiences and direct booking options. This could lead to increased revenue and customer loyalty, as hotels can tailor their offerings to meet the specific needs of travelers using AI tools.
What's Next?
Hotels have a limited window to act and establish visibility in AI platforms before the competitive landscape solidifies. Those who move quickly can influence AI recommendations and secure a competitive advantage. As AI becomes more integrated into travel planning, hotels that adapt early will likely benefit from increased direct bookings and reduced commission costs. The industry may see a shift towards more personalized and direct engagement with travelers, driven by AI technology.
