AI chatbots make OTA visibility critical for hotels

Online travel agencies are transforming their business models, AI is reshaping the economics of distribution, and social media is entering the booking game. Meanwhile, hotels face mixed short-term performance while cautiously optimistic long-term rate growth is on the horizon.

U.S. online travel agencies evolve with new strategies

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After years of aggressive expansion, U.S. online travel agencies (OTAs) such as Expedia and Booking.com are pivoting from growth at all costs to strategies focused on sustainability. The domestic market is plateauing, competition with Airbnb is intensifying, and customer acquisition costs remain high. In response, OTAs are sharpening their loyalty offerings, expanding B2B partnerships, and investing heavily in artificial intelligence.

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Loyalty and customer retention

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Loyalty is becoming the linchpin of OTA strategy. Expedia and Booking.com are doubling down on loyalty programs to keep travelers within their ecosystems, helping reduce reliance on costly marketing spend. For hoteliers, this raises the stakes: properties that fail to participate in or align with OTA loyalty schemes may risk reduced visibility in customer searches.

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Growth of B2B partnerships

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A less visible but highly significant trend is the expansion of B2B services. Expedia’s B2B business already accounts for 30% of its revenue, driven by partnerships with airlines, financial services, and other travel providers. This diversification means OTAs are embedding themselves deeper into the travel value chain, influencing distribution dynamics well beyond hotel listings.

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Impact of AI on the travel industry's look-to-book ratios

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The 1990s witnessed a manageable look-to-book (L2B) ratio in the travel industry of about 10:1, a stark contrast to the current scenario where the ratio is climbing to 20,000:1 due to technological advancements such as direct connects and APIs. This surge, primarily driven by the rising prevalence of dynamic pricing and personalized offers, is set to escalate further with the adoption of agentic artificial intelligence (AI) in travel shopping. AI is predicted to trigger an unprecedented explosion of search requests, potentially inflating the L2B ratio to 200,000:1 by the end of the year.

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This shift presents a challenge for travel companies as they strive to manage escalating operational costs. However, AI also harbors potential solutions; innovations in caching technology and machine learning are being explored to streamline search processes and manage system loads efficiently. Companies like Sabre are actively extending their cache technology by leveraging AI to optimize calls and manage offer repositories. Additionally, industry experts suggest that AI-driven personalization and dynamic pricing will contribute to the industry's evolving landscape, with potential new models for monetizing web content access and AI interaction.

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The development of new standards, such as an llms.txt file analogous to robots.txt, aims to guide AI how to navigate websites, potentially impacting the industry’s dynamics. With these technological shifts, companies need to adapt quickly to ensure sustainability amidst the rising costs of AI usage and maintain competitiveness in an evolving market landscape.

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Industry implications

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Crucially, as AI chatbots like Expedia’s Romie or Priceline’s Penny guide travelers through their booking journey, the listings that surface most often will be those at the top of OTA rankings. This makes competitive positioning on OTAs more critical than ever. Properties that rank higher will enjoy greater exposure not only to human travelers browsing OTA websites but also within the AI-driven recommendations that are quickly becoming a dominant search pathway.

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The pressure to optimize OTA partnerships while defending direct channels will therefore intensify. Hotels that fail to secure strong OTA visibility risk being bypassed altogether in AI-driven search results, while those that invest in ranking optimization will stand to capture disproportionate market share.

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Global hotel rates predicted for moderate increase in 2026

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Global hotel rates are projected to see modest growth by 2026, according to a recent industry report. The report highlights that after the significant disruptions caused by the pandemic, the hotel industry is gradually recovering. This recovery is fueled by a resurgence in travel demand and a cautious approach to pricing strategies by hotel operators. The projected growth in hotel rates reflects cautious optimism, aligning with a broader economic upturn anticipated in the coming years.

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Despite the positive outlook, the report suggests that growth will be uneven across regions, with emerging markets possibly leading the way in rate increases. Key factors influencing these projections include inflationary pressures and evolving consumer travel patterns, which have shifted towards more flexible and experience-driven accommodations. As hoteliers plan for the future, understanding the nuanced dynamics within the global market will be essential to capitalizing on potential growth opportunities.

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Challenges persist for the U.S. hotel industry

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The U.S. hotel industry experienced a 1.3% drop in revenue per available room (RevPAR) in the week ending August 23, 2025, continuing a troubling trend of decline seen over the past twelve weeks. This decrease was primarily led by a fall in occupancy and a minimal dip in the average daily rate (ADR) of 0.2%, particularly in the Top 25 Markets which saw a 3.8% RevPAR decrease. Conversely, a modest RevPAR increase of 0.4% was noted in all other markets.

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Chicago and Houston significantly influenced the national downturn. Chicago's RevPAR dropped by 19.9%, largely due to a dramatic 22.3% fall in ADR compared to the previous year during the Democratic National Convention. Meanwhile, Houston's room demand suffered a 29.5% decrease, attributed to unfavorable year-over-year comparisons with last spring’s storm-induced demand spike. Houston's Midscale and Economy classes, in particular, saw more than 50% RevPAR declines recently.

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Despite these struggles, the luxury class hotels bucked the trend, demonstrating steady growth in RevPAR over the past month. In contrast, the Upper Upscale class generally saw RevPAR declines due to reduced occupancy. Globally, hotel markets exhibited a more positive trend with RevPAR increasing by 5.4%, bolstered by RevPAR gains in France following the Olympics and sustained high occupancy rates in regions like Spain and Japan. Calendar variations in August and September are likely to influence future performance, impacting comparative figures from previous years.

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Otamiser is the world leader in OTA optimization, Otamiser helps hotels across Europe, the U.S., and Asia improve OTA rankings and revenue through data-driven pricing and local market insights.

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