Will AI Help Hotels Shift Bookings from OTAs?
2023 has ushered in a range of innovative AI-driven solutions for hotels, with technologies like ChatGPT at the forefront. The potential impact is vast—spanning from back-of-house operational improvements to enhanced guest services, unique experiential offerings, and refined guest segmentation.
One of the most immediately impactful applications of AI in hospitality is the chatbot. By integrating an AI-powered chatbot into a hotel’s website, hotels can significantly improve the guest experience, enabling visitors to find detailed information about the property or even complete transactions, like room bookings and package purchases, seamlessly.
While hotel brands explore and implement AI-driven strategies, major OTAs like Booking Holdings and Expedia are also integrating ChatGPT-based planning tools to keep travelers booking within their platforms. This shift is part of a larger competitive push to improve booking experiences and retain customers directly within their ecosystems.
The central question arises: can hotels use AI to encourage more direct bookings and reduce reliance on OTAs? Redirecting guests to book directly would boost hotels' bottom lines by lowering the commissions typically paid to OTAs. But to achieve this, hotels need a strategic approach to AI, focusing on both the website and the on-site guest experience.
On the other hand, OTAs have a significant lead, not only in user experience, visual appeal, and robust booking platforms, but also with strong loyalty programs that make it more enticing for travelers to book through them. This advantage will be tough for hotels to counterbalance.
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However, AI’s role in hospitality can extend beyond booking. From automating operations and alleviating labor shortages to enhancing marketing efforts, AI can refine paid ad campaigns, help with keyword insights, and generate creative content for social media, newsletters, and blog posts, all of which can improve engagement and drive revenue.
For travelers, the AI-driven ability to source detailed answers to complex questions can be a game-changer, streamlining the research process and delivering valuable time savings.
With AI-powered tools becoming a standard feature on travel sites, it’s clear that each platform’s AI will remain exclusive to its own content and partnerships. No one is planning to remove the “fences” around their customer base and content.
For OTAs, integrating ChatGPT to support guest inquiries may further strengthen customer loyalty, improving their customer service reputation and their competitiveness in converting hotel bookings. During the pandemic, OTAs faced scrutiny for limited call center support, leading some travelers to book directly with hotels that could better handle guest questions. With ChatGPT-based services, OTAs can now address these issues, potentially leveling the playing field with hotels in handling guest inquiries.
