AI is rapidly transforming hotel discovery, booking, and operations, with a new report from NYU SPS and BCG highlighting increased reliance on AI assistants, ongoing staffing shortages, and the need for hotels to adapt their digital and operational strategies to remain competitive.
AI Adoption Shifts Hotel Discovery and Booking
A recent analysis by the NYU School of Professional Studies Jonathan M. Tisch Center of Hospitality and Boston Consulting Group (BCG) reveals that artificial intelligence is changing how travelers find and book hotels. According to the report, 37% of travelers already use AI-powered large language models embedded in online travel sites for trip planning and booking. This marks a shift from traditional search-and-scroll methods to a new “ask and book” approach, where digital assistants play a central role in recommending hotels.
As a result, hotels are now competing to be included in the shortlist of AI-generated recommendations. This requires a stronger digital presence, improved data integration, and the adoption of AI-native commercial and operational capabilities.
Impact on Online Travel Agencies and Hotel Revenue
The report notes that commissions for Online Travel Agencies (OTAs) remain high, ranging from 15% to 30%. However, AI is changing how hotels are ranked and recommended, moving the focus from paid advertisements and search engine optimization to algorithmic relevance. The prominence of a hotel in AI-generated recommendations is increasingly determined by the quality and consistency of its digital content and its readiness for AI-driven distribution.
To stay visible and competitive, hotels are advised to prioritize three areas:
– Creating machine-readable, reliable digital content that answers traveler questions.
– Preparing for AI-driven distribution models that may introduce new fees and placement strategies.
– Implementing dynamic revenue management systems that can adjust pricing and channel allocation as demand fluctuates.
Operational Challenges and AI Solutions
Labor shortages and rising costs are significant challenges for the hotel industry. In North America, 65% of hotels reported staffing shortages in 2025, and labor costs increased by 11.2% year over year. These pressures are driving hotels to adopt AI solutions to improve operational efficiency.
Early examples of AI deployment in hotels include:
– AI-synchronized housekeeping schedules, which have led to a 20% increase in room cleaning and preparation speed.
– AI-enabled kitchen analytics tools that have reduced food waste by approximately 50% within eight months.
These technologies help hotels manage costs and maintain service quality despite staffing constraints.
Data Integration and Workforce Skills Remain Key Issues
The effectiveness of AI in hotels depends on access to integrated, high-quality data about guest behavior and facility operations. However, many hotels still rely on disconnected systems, making it difficult to obtain a comprehensive view of their business. Nearly half of hoteliers report challenges in accessing critical information, often spending significant time compiling reports from various sources.
Workforce skills are another concern. Only 2.9% of full-time employees in travel and tourism have AI skills, compared to 21% in the technology and media sectors. While the number of AI-skilled hospitality roles is growing at nearly 5% per year, the industry faces a gap in expertise needed to fully leverage AI technologies.
Conclusion
The NYU SPS and BCG report highlights the growing influence of AI on hotel discovery, booking, and operations. As AI-driven assistants become more common among travelers, hotels must adapt their digital strategies, upgrade operational systems, and invest in workforce skills to remain competitive in a changing marketplace. The full report is available on the BCG website.
