The AI booking shift: What hoteliers need to do now

The name of the game is make sure the LLMs can find you and that they drive people to your website so that you can continue to own that booking. Welcome to the Hotel Moment podcast, presented by Revinate. I'm Karen Stevens, Chief Marketing Officer, joining you from sunny San Francisco, California. And I'm Dylan Cole, Managing Director of Revinate Europe, calling in from Amsterdam. This is the podcast where we explore how technology shapes every moment of the hotelier's experience, and more importantly, how the right technology delivers real outcomes for hotel teens and guests alike. From revenue strategy and guest communication to operations and marketing, we sit down with the people transforming hospitality around the world. Depending on the conversation, sometimes it'll just be me behind the mic, and sometimes it'll be me bringing a European perspective and stories from across the global hospitality industry. Whether you're a hotelier, a tech enthusiast, or just curious about where hospitality is headed, you're in the right place. Let's get into it. Dylan Cole, welcome to the podcast, which is also your podcast. How are you? Thanks, Karen. It's great to be on here with the original OG of the podcast, Karen, So thanks for having me, but I'm good. Absolutely. You know what, it's been so fun having you co host with me this year. It's really brought some cool variety to the show and getting really the European perspective. So I'm really excited to actually be able to sit down and do one of these with you. Yeah, for sure. It's been really good doing the podcast in Europe this year. I think it's allowed me to go a bit deeper with some of our clients over here and just some other leaders here. And in hospitality, I've learned a lot about them personally, about what they're doing in their businesses, and sort of how they think about the future. So not only has it been good for our audience, but it's been good for me personally to build my relationships and to understand a lot of the folks in our industry. Yeah, it's a great industry. I think that's what I love most about doing the podcast and interviewing hoteliers, because the stories of how they got into the business, why they stay in the business, what it means to them to deliver guest experience. Like, that's all legit, that's all heartfelt, and I really can't think of another industry that has that kind of gravitas and pull towards it. Totally. They love it. There's not one person I've spoken to yet. At the core of everything, they do love being a hospitable person and Love hosting their guests. And everything they're doing is for their clients. Their guests. Clients. The guest experience. Yeah. So at the same time, obviously, the whole focus of the podcast is how technology impacts hoteliers, and I think now more than ever. I mean, I know every podcast I've done this year, we've talked about artificial intelligence, and that's been really. Obviously it's coming on strong. It's been around for a few years. But this week, or actually, well, in the last, call it, 10 days, we. We had an announcement from Google where we really saw a big shift. I mean, obviously, Google, everybody's always kept their eye on Google and what was going on there. But they announced that they're expanding hotel bookings into its universal commerce protocol, which is all about bringing hospitality into the same AI ecosystem that has been transforming retail. So, I mean, what was your reaction when you saw that? Yeah. Cause I think everybody just thought of AI initially as this spot where you do your research. Right. But now it's moving beyond that. So now you're starting to see it not only in the discovery phase, but now it's in the comparison phase, when you're comparing properties you might stay at. And now with this UCP rollout, I think we're starting to see it move more towards booking directly in the AI. So that's going to be a huge shift. And we're obviously just in the beginning of all this. But think about, we're going to be in like five, 10 years. I know. Even five, 10 months. I mean, that's how fast it's moving. Right? I mean, it's crazy. Like, I know. And as a technology company, we're kind of getting out the popcorn at this point, because, you know, we've been preaching about the importance of driving direct bookings for a long time, and obviously OTAs are big advertisers on Google. So to see Google do this move where they're going to drop that booking right to the hotel. Right. You know, allow that booking to happen. Right there is interesting. And when you talk about all the hoteliers, we've been talking to the importance of having your data in the right place and driving that booking through. Like, before we talk about just make sure they can find you, make sure you drive that direct booking. But now more than ever, if your data is not centralized to where you can take advantage of Google and other LLMs, I mean, what are you going to do? Right, right. And not only that, like, maybe you do show up in searches, but you start showing up more than you need to be maybe to the wrong guests and you're overspending there too. Right. So it's like not just about spending tons of money on these LLMs and trying to appear everywhere, but how do you do it really smart so that your spend is very cost effective on these AI platforms. So, so much to think about. And sometimes it's a little bit unfair, I think. Not unfair. Maybe it's the wrong word. But when I think about some of our guests who really got into this business because their heart was just in taking care of their guests, right now they got this AI in front of them. Yeah. Anyway, there's a steep learning curve, but hopefully a lot to gain too. Right. Well, and going back to the topic of this podcast, I think that's what we're here to do is to share some of that thought leadership. So I'd love to share a clip actually from Jared Tombach who I started spoke with. He's the VP of Digital strategy at Starwood Hotels. So he's got beautiful brands, one hotel Baccarat. I mean, Treehouse. I'm talking beautiful and such a beautiful asset. But let's hear what he has to say about how to kind of stay ahead of the curve in this new age of booking. Truly the best experience for guests to be able to interact and have that direct relationship with the guests. But I do think we're at a pretty pivotal time, as you said, with certainly with AI having implications for distribution, I think there's a lot that's still to be determined in terms of what impact that's going to have. But I also think that there's a lot of potential for how that reshapes discovery and ultimately the booking process. I'm sure you saw, as we all did, Google's announcement that their next focus for agentic commerce is in the hospitality space. So that's exciting to see. But of course, with that, we want to make sure that as these new distribution channels open, that we are able to drive as much direct as possible. And so I think that's sort of the ongoing challenge. And certainly on the paid media side, we've only seen costs continue to increase and competition continue to increase. So focusing as much as we can on scaling back that component and being able to drive more direct is a focus for us, certainly. Absolutely. And when you think about Google and other LLMs getting into the space, well, who are in the space, clearly, again, it comes down to who owns the data and the content. So, Dylan, now I think we should talk a little bit more about something that it Feels like it's a little farther out, but it is something that people are talking about. So we just had our Navigate conference, which is our users conference in North America and one of our speakers was from McKinsey, Ryan Mann, his VP and he was talking about how there's four different scenarios that could happen for AI and one of those was what we call kind of an agent to agent booking. So what the idea here is is that, you know, today if I'm going to book a vacation, I probably have 25 browser tabs open while I figure out the perfect destination, you know, where the restaurants are, all of that. In the future it could be possible that I have my own personal bot, right, the Karen Bottom that knows what I like and I just speak to it. So give me a four star hotel with a great restaurant near a diving location in Croatia, whatever, and that booking happens automatically. So first I just want to get your reaction. Is that something you've heard and what do you think? I already think that this might help my marriage because I already rely on my wife bot who's much better hand planning than me and then it's really not fair to her. So this could really help me out in my relationship, I think. But no jokes aside, yeah, I've heard about this and I think it's a really interesting concept that these AI agents would know my preferences or my family's preferences and be able to go out and scout the right vacation for me. And I think when you start to think about how a hotel should be preparing for this, although it seems like such a distant future, well then you got to make sure that your data is in order so that your hotel agent or your, what is it that'll be your new salesperson for your hotel will actually be able to communicate with my AI bot and make sure that they show up when my agent's out there shopping for me and that they make. Yeah, you know, one of the guests that we had a conversation with so far this year, who's not a hotelier, he's actually the CMO of Twilio, a gentleman named Chris Kohler. And Chris told me he booked his whole vacation on ChatGPT, which was fascinating. But we also started to talk about what they're seeing. So Twilio, obviously a massive company. What he's seeing in terms of the new kind of AI bots and how that's going to change the future, we're seeing a crazy, crazy acceleration of AI agents. If you think about how consumer behavior has shifted just in the last 18 months where you wanted to travel. And as used to be, I'd go to a travel agent or I'd go to an aggregator and I'd say, hey, I want to go on a trip to Rome. You know, please give me the flight options and hotel options and I'll bundle that and you know, be excited about it. Then we moved into a world where the hotels went direct. We often found it ourselves, whether that was through Google or some referral from a friend. And Google was your friend on that front. Now with the advent of LLMs, that's completely changed. And you're not going to find a hotel, you're going to create the full trip. And I'll give you an example. So last year I spent a couple weeks in Rome with my family and we literally charted out the entire experience through ChatGPT. You know, day by day itinerary, give us links to the museums where we need to buy the tickets, what hotels should we stay in, which restaurants should we consider that are within walking distance. And we basically planned the whole thing through ChatGPT. So consumer behavior is changing now. That's sort of the first step as we see it, where we're starting to see more and more across industries is what's the next place where AI starts to play basically in the customer experience realm. More and more brands are creating AI agents for support. Right. Whether that's sales or service. And so you're replicating the basic call center experience with an AI agent that ultimately you're now engaging with AI and this is becoming sort of more ubiquitous in the industry. I think the next iteration is you're not going to be calling and trying to coordinate all of that. Your personal agent is, especially on the consumer side, you're going to see more and more of these agents and you may have your personal travel agent that you've created that understands all the context about you, what your budget is, what hotels you like to stay in, when you like to travel, the locations you want to travel. They create that really unique, rich profile about you that then they're going to go share and try to engage. And I think there'll be a world where your agents will either engage with humans or your agents will deal with the hotel's agents and they'll negotiate and work through that. That's the future of where we're headed. So, yeah, that was a really great perspective from Chris. And when I think about how OTAs and LLMs will play together, I don't see there's a world where all of a sudden we wake up and booking.com is gone. Right? They have 24,000 employees there. They do a lot of things beyond just the booking itself. They handle the support of their customers, the support of the hotels. There's a lot of pieces in play. Where I think we'll see more of a shift is that maybe booking.com becomes the interface or is more partnering with ChatGPT where the search discovery selection all happened on ChatGPT but then the booking actually still runs through something like booking.com I think that's more likely, at least for the near term future. What I think is really interesting for hotelier is we know that years ago OTA started creeping up and nobody really paid attention to it. And now all of a sudden we have booking.com with 24,000 employees. Right? This is an opportunity for hotels to look at this shift in search and discovery for guests and really get their data together to get all of their data in order so that they can start competing in this search on LLMs and showing up ahead of OTAs potentially and showing up to the right guests and hopefully driving more direct bookings and being leaders in this opportunity rather than just chasing the LLMs and the OTAs. Ultimately I agree with you 100%, Dylan. I mean, two things I want to pick up on there. One, you're absolutely right. Devil's in the details. It's one thing to much my bot with the exact vacation, it's another thing to actually and even book it, right? But it's another thing to actually fulfill that. So what if I have changes to my reservation? What if I have questions about my reservation, you know, like especially vacations. I mean you mentioned your wife does all of your bookings. It's like vacations are a big deal for the family. So you want to know that it's got a kids club and what happens if I need a car parking or. There has to be a way to answer all of those questions and that's not something that you want to typically deal with humans on. And then the second thing that I think is important is that major chains, big global chains, are making massive investments in AI to stay ahead of this game. And obviously OTAs are making investments. But if you're an independent hotel and you're a small group, you have to make sure that you have a strategy as well and a technology foundation that'll allow you to play in this game because if not, you're going to lose more share. So the name of the game is make sure the LLMs can find you and that they drive people to your website so that you can continue to own that booking. Right. And I just want to add one more final thought to that because I hear this a lot. Like, I think some people get discouraged because they'll recognize that still a lot of their bookings will still come through OTAs. That's fine. OTAs are not awful. They exist for a reason. Getting a guest to book with you that's from Japan would probably cost you a lot more in advertising than 15%. So they are great. But it doesn't mean that you should just give up and not try to win back a certain percentage from them, because that can be a real impact to your business. Yeah, that's right. Make sure you, as soon as that guest hits your doorstep, that you own the data and the relationship from there on. That's 100% correct. All right, cool. Let's go on to the next clip here. So I want to talk a little bit about how you optimize for AI search. So one thing that's really important is that, you know, with AI, with ChatGPT and all that, people are no longer saying, you know, you're no longer typing into Google, give me the best hotel in Barcelona. Instead you're saying, find me a boutique hotel in Barcelona with great walkability, strong wifi, near the beach, great restaurants, blah, blah, blah. So it's becoming this really conversational way to look for anything. So we've spent 20 years optimizing for Google search and OTA placement, but now hotels need to be able to optimize for kind of that long tail verbiage, for lack of a better word. And I want to play this clip from Aaron Miller, who's the VP of Digital Marketing and CRM at Highgate. And we talked about this recently. So here's Aaron. At the end of the day, you are a human being going to a new place and staying in a physical. You know, we're in hotels, so we're staying in physical spaces. So I would be surprised if we just all allow bots to do everything. I do think there will be. And there you're starting to see it now, this collaboration between a prompt and the content being returned and how everybody on both ends are trying to optimize that. Right. We're going through so many processes and pilots and trying to understand, you know, how do we get our hostels to show up. We. When somebody's looking to book a hotel in New York City, it's the new version of search in so many different ways. I'm hopeful that There is that renaissance. Hopefully it's not even a renaissance. Hopefully. People love to book on your website, but making sure that it's just, you're found, it's easy to book and you get off the bot and you go to a beautifully curated website to really get the feel for it, because you're only going to get so much on the chat itself. And ideally, just like I talk about with email campaigns, I mean, my goal of any email campaign is to get somebody onto my website. You can't book your room on email. And maybe we're talking about booking a room through ChatGPT or what have you, but I still think that there's going to be that link out, even if it's inside the app and the browser version and all that. I still think that most users for a little while longer want that same type of experience that they're comfortable with and familiar with. It's a big deal to book travel. Yeah, that was a really good clip. And I also enjoyed the part of the interview where he talks about how you can't return a hotel stay. It's not like a pair of sneakers or a hat. If you don't like it, you return it. So his point was that obviously your website needs to be great and a true representation of that experience so that there isn't buyer's remorse and that ultimately AI needs to be optimized to bring people to your website, drive them there, and make sure that they're having a great booking experience and that ultimately a great stay. That's with that expectation. So, Dylan, so shifting gears a little bit since I got you on the podcast. I really want to talk about what's going on in Europe. So I have a few questions for you. A little rapid fire, if you don't mind, just so we can get into it. Cool. Sure. All right, so the first question. Are hoteliers actually worried about AI replacing OTAs? I mean, we just talked about this with Aaron and some other stuff, but how are hoteliers feeling about it? I think most think that it will still be coexistence between the two. I think that folks still see very much that OTAs are still in control of the infrastructure, the payments and inventory. They don't think that's going away, but everybody's acknowledging that the discovery is changing a lot, and everybody's trying to figure out how to make sure their properties are showing up in this new way of discovering or, you know, booking a vacation. Great. So my next question for you. What's the biggest misconception that hotels have about AI right now. I think that we're only now starting to understand the power of AI and thinking about the technology hotels should be using as it relates to AI. I think the first things we saw were chatbots. That's everybody's first thought is, okay, a chat bot can more easily handle quick questions like what's the password? Or what's the WI fi? And that's all true. I think that people want AI to respond to their online reviews and that's great too. But I think the bigger win for hotels is now about the shift in distribution and discoverability for properties and really starting to add AI to places where it will actually impact operations, their revenue and the guest experience, not just some of these lower level touch points. I think people are starting to wrap their head around that. Right. So this leads. This is a beautiful segue to the next question. So what should hotels prioritize first? There's a lot to do. So what's your recommendation for what they should start to prioritize? Sure. So Bryson always likes to tell this story, and I'm sure you've heard it, Karen, where he talks about a grocery store that wanted to do automated suggestions for recipes based on all their inventory in the store. And then all of a sudden the AI started recommending mixing house cleaner with pasta sauce and then Kool Aid and all that. So the idea was great, but like the data was bad. So ultimately you have to start with clean data. There's no way around it. If the foundation isn't there, then you're in trouble. You then need a proper CRM as the foundation of that that sits on top of or handles the cleaning of that data. Right. Or both. You then need a direct booking strategy that you would use your CRM to put into effect. You need a strong reputation management tool because we know these LLMs are hungry for data. You need personalized communications because there's no excuse. Now in this world, with all we know about guests and the AI, we have to be sending out generic communications to guests. And then finally you have to own your first party data because we know that as the world gets more and more concerned about data privacy and things like that, you could really only use the data you own to facilitate communication. So that's really also important. And obviously, obviously what we are describing is the Revinate platform 100%. I don't want to pretend like we're not, but not that we've known this strategy for a long time. I think what's exciting is that with upgrading all of our customers to a robust cdp, which happened last year. We now have really the foundation in place. And by foundation I mean robust identity resolution that runs across not only property management systems, but also all of the outlets, all of the data you can capture in restaurants, spa, golf, just about anything that is now funneling in to give you that single rich guest profile. So I think it's important, all those components that you mentioned, all of that is necessary to be able to activate and take advantage of A.I. all right, so final question. This is a question for Mel, your beautiful wife. So will guest trust AI to fully book travel? So we've talked about this a little bit, but how long do you think, what do you think that the future is? Do you think that somebody's really going to use a bot? I guess I can only really speak for myself. It's when I think about questions like this, I think about how I feel. And vacations aren't cheap. It's not like we said before, like buying a pair of sneakers. Although I don't think I'd trust AI to buy my sneakers yet either. I do like my sneakers and I prefer to see what they look like before they're purchased. I mean, I think we'll get closer and closer to that over time. I would imagine that at least for the foreseeable future, AI will bring back suggestions to their agent and then from a pre selected amount of options, then the potential guest will make the booking. I don't see in the near term where it's just like all completely done and you blindly go into your vacation. But who knows, who knows, maybe that is, maybe younger people will get more and more comfortable and that's where we'll end up someday. Yeah, I think that that's true. You might have generational shift, like certainly. I mean, I know even today for me, my generation, I do things old school and I always will. So younger people might do that. I also think for luxury travelers, you hit on it a little bit there. When you talk about the expense of a vacation. This is for most family households, one of the biggest expenses of the year is to take the whole family somewhere. So I just think that it's going to be a long time before Jarrett from Starwood Hotels agrees with me on this. Like when you have those luxury vacations, you want to talk to the people and understand what exactly you're getting. So we'll see. It'll be interesting to see as they mature how things change because the technology is also changing very quickly. So that kind of brings us to our last Topic here is like, how do hoteliers prepare? I mean, I would say, how do you prepare for the next five years? It's really the next 12 months. I mean, we're coming into budget season. Like, they're trying to figure out what the heck to do. So how do we prepare for that? What are your recommendations? I would say first you got to invest in your first party data, because like we said before, as regulation gets stronger and stronger, you really only have the option if you want to be compliant, to use your own data. And so in order to invest in that, you need to have a CRM or cdp and you need to have one that can clean that first party data and put it in a format in an actionable position to be used by your property. You also need to improve the direct booking experience. You got to think about everything your guest is interacting with. Is it mobile friendly? Is it personalized? Does it have loyalty incentives for the guests? You also have to make the content on your website, and I know we experienced this at Revinate. Your team does a great job with this in making sure that Revinate shows up in searches and we structure our website in that way. But hotels need to do this too. They need to have a structured FAQ section. So a really easy way for the AI to pick up on what your cancellation policies are, amenities around your hotels, local things that happen around your property, so that when the agents are searching for these specific things on behalf of their customer or the guest, that it will pick up on them. And you'll show up in a search. And then you gotta automate intelligently. Make sure you're doing that with, like we talked about before, guest messaging upsells, review response workflows. You don't need to be manually responding to reviews anymore. And then finally, you just need to kind of get back to what matters too, which is guest recognition. AI can now help you really recognize guests and their loyalty and their preferences. And we all know that feeling of walk into a hotel you've been to 10 times and they say, welcome. Have you ever been here before? There's nothing worse that it could really turn you off. So really use an AI to make sure that you are focused on guest recognition. Yeah. Well, Dylan. Hey. I've really enjoyed the conversation today. Thank you for joining me. All right. It's fun to be on one together. And I think I just would give the final takeaway that the future of hospitality. I think what we're seeing saying here is who knows what's going to happen with AI? But we do know that humans still love humans in the loop and vacation experience is a very personal thing. So it'll be interesting to see how things evolve. But as we kind of kicked off the conversation with why Hoteliers Do Their Job, it is about guest experience and it is a heartfelt profession. So, you know, we're here to help. Any final thoughts for our audience before we sign off? I think that people just need to recognize that AI is changing the world much faster than any of us can even imagine. And I really would encourage this industry to make sure that we don't let this opportunity to take control of our business and our data and our relationship with our guests for granted. And let's act and make sure that we stake our claim to what we deserve. That's a great way to end it. Thank you, Dylan. Appreciate the time. Thank you. Thank you for joining us on this episode of Hotel Network Moment. By Revinate, our community of hoteliers is growing every week, and each guest we speak to is tackling industry challenges with the innovation and flexibility that our industry demands. If you enjoyed today's episode, don't forget to subscribe, rate and leave a review. And if you're listening on YouTube, please like the video and subscribe for more content. For more information, head to Revinate.com HotelMomentPodcast until next time. Time. Keep innovating.