How We Got Here (The OTA Surrender)
To understand where AI is taking us, we have to look at the moment the industry lost its way: the rise of the Internet.
When the digital revolution arrived, hoteliers stood at a crossroads. They had the opportunity to use the Internet to build deeper, direct relationships with their guests globally. Instead, they chose the path of least resistance. They handed the keys to the kingdom over to Online Travel Agencies (OTAs) like Expedia and
Booking.com.
Why? Because it was easy. It filled rooms. It required less effort than building brand equity or training staff to sell value. But the cost was the soul of the business.
"The moment a hotelier decided it was easier to pay a 20% commission than to maintain a relationship, the guest ceased to be a human and became a commodity."
Since then, the industry has become transactional by default.
- The Guest: Is no longer "Mr. Smith, who likes a quiet room away from the elevator." He is Reservation ID #99843, arriving via a wholesale channel.
- The Product: Hotels have become generic boxes to fit the standardized filters of OTA search engines. Uniqueness is a risk; conformity is safe.
- The Interaction: The front desk has devolved into a data-entry checkpoint. Swipe card, check ID, hand over key.
We stripped the humanity out of the process long before ChatGPT arrived. We trained guests to expect nothing more than a clean bed and a Wi-Fi password. Now, as we stand on the precipice of the AI revolution, we are not looking for ways to be more hospitable. We are simply looking for a cheaper, faster way to process the transaction we created.
The ROI Trap (Why Owners Won't Save Us)
To understand why this transactional shift is inevitable, you have to look at who actually owns the hotels. The romantic image of the family-owned innkeeper is largely a relic. Today, the industry is dominated by Real Estate Investment Trusts (REITs), private equity firms, and institutional asset managers.
For these stakeholders, a hotel is not a "home away from home." It is a generic asset class on a spreadsheet, sandwiched between warehouse logistics and office parks.
The shift in ownership has fundamentally changed the metrics of success.
- Old Metric: Guest Satisfaction, Word of Mouth, Repeat Visitors.
- New Metric: RGI, NetRevPAR, EBITDA, and ROI.
In the eyes of an asset manager, "Hospitality" is an expense line. It is expensive to hire empathetic staff. It is expensive to train them to anticipate needs. It is expensive to empower them to give things away to fix a problem.
Transactions, however, are cheap.
This creates a perverse incentive structure. Owners are not looking for technology that makes guests happier; they are looking for technology that makes the P&L look better. Humans are viewed as "variable costs" prone to errors, sickness, and turnover. AI is viewed as a "fixed cost" that scales indefinitely.
When faced with the choice between investing in a highly trained concierge team or a chatbot license that promises to reduce labor costs by 15%, the asset manager will choose the software every time. The "Easy Way Out" is now backed by the Board of Directors.
Enter AI – The "Personalization" Mirage
This brings us to the current buzzword dominating every hospitality conference keynote: AI Personalization.
Tech vendors and consultants promise that AI will usher in a new golden age of service. They claim that by analyzing data points, we can deliver hyper-personalized experiences. But let’s call this what it really is. It isn't hospitality; it is surveillance marketing.
True hospitality is emotional. It is a bartender pouring you a glass on the house because he notices you look exhausted after a long flight. It is a front desk agent upgrading you just because it’s your anniversary and she wants to make you smile.
AI "personalization" is transactional logic dressed up as service
- The Reality: The AI notices you ordered a Pinot Noir last time. It doesn't send you a glass; it sends a push notification to your phone offering a 10% discount if you buy a bottle right now.
- The Logic: This is not a gesture of care. It is an algorithm designed to maximize TRevPAR (Total Revenue Per Available Room).
We are building a future of "Personalized Transactions." The system will know your room temperature preference, your pillow type, and your wake-up time. It will execute these logistics flawlessly. But it will feel like interacting with a very smart vending machine.
The "Uncanny Valley" of service is approaching fast. You will receive texts from "Sarah at the Front Desk" asking how your stay is, complete with emojis. But you will know Sarah isn't real. You will know "Sarah" is a Large Language Model optimized to prevent negative TripAdvisor reviews, not a human being who actually cares if the AC is too loud.
The result? You get exactly what you paid for, tailored to your data profile, without a single moment of genuine human connection.
The Human Vacuum (Why Staff Won't Save Us)
If there is one argument hoteliers use to defend the future of the industry, it is this: "Guests will always prefer a human smile to a machine."
This is a lovely sentiment. It is also historically inaccurate. Guests prefer a human smile only if that human is competent, empowered, and helpful.
The hard truth is that the industry has spent decades devaluing its workforce. By treating staff as interchangeable, low-wage labor, we have created a service vacuum. How often have you stood at a front desk while a distracted, undertrained agent furiously types on a keyboard, ignoring your presence? How often has a simple request been met with, "I don't know, let me ask my manager"?
In this context, AI wins by default.
Hoteliers are about to take the "Easy Way Out" one last time. Faced with the difficulty of recruiting, training, and retaining high-quality talent, they will simply stop trying.
- Why train a concierge when an AI chatbot has better local knowledge and speaks 40 languages instantly?
- Why hire a night auditor when an automated system creates fewer accounting errors?
The technology isn't just cheaper; in many cases, it is objectively superior to the unqualified staff currently manning the desk. We are creating a self-fulfilling prophecy: we failed to invest in humans, so the humans failed the guests, providing the perfect justification to replace them with algorithms.
Conclusion: The Age of the "Accommodation Utility"
So, where does this leave us?
If we look at the trajectory—from the OTA commoditization to the ROI obsession, and finally to AI automation—we aren't necessarily heading toward a disaster. We are heading toward a Utility.
Consider the evolution of air travel. There was a time when flying was an "experience" defined by service and luxury. Today, for the vast majority of travelers, it is simply a logistical necessity. We do not want a conversation at the check-in desk; we want the app to work, the queue to move, and the plane to leave on time. We have traded "hospitality" for reliability.
Hotels are following this exact path.
The hard truth is that most guests will welcome this AI-driven future. They want seamless. They want frictionless. They will be perfectly happy checking in via facial recognition, having their room temperature automated, and never speaking to a human being. They want their hotel stay to be as reliable and invisible as running water. This is the new reality: The Hotel as Infrastructure.
Still dreaming about hospitality?
But for the hotelier who dreams of true hospitality, this presents a brutal challenge.
If you want to differentiate yourself in a world of perfect utilities, you cannot just be "better" at the transaction. The AI will always beat you at that. You have to go against the flow of the entire industry. You have to consciously choose inefficiency.
You will have to hire staff not to process tasks, but to create moments that no algorithm can justify on a P&L. You will have to offer friction—the good kind, where a human stops you to ask how your day was—in a world racing to be frictionless.
That is an expensive and difficult battle to fight. The current of the industry—the technology, the investors, and even the guests—is flowing powerfully toward utility. Most hoteliers, looking for the easy way out one last time, will simply let the current take them.