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The most significant impact might not be operational, but psychological. Why? Because it's the hotel industry's fault. Let me explain:For years, hotels have trained guests to treat bookings as placeholders: reserve today, decide later.

In my view, the Full Prepayment Model is not the future of hospitality. While full prepayment has been practiced for decades for charter vacations, extended beach vacations and unique experiences like safari tours, it’s definitely not user friendly as far as plain hotel bookings are concerned.  Merchant bookings - fully prepaid bookings - at both Expedia and Booking  now represent over 70% of the total gross bookings. Improved cash flow, controlling the price the customer pays, opportunities to bundle hotel stays with air, transportation and experiences are some of the reasons for the OTA preferences of the merchant model.

The biggest impact of full prepayment is that booking a hotel becomes a much bigger commitment for guests.Hotels benefit from fewer cancellations, better cash flow, and more predictable occupancy.But guests may book less often or take longer to decide because they must pay upfront.Trusted brands like Marriott International and Booking.com may benefit most, while smaller hotels could struggle more with guest trust.BNPL services may become very important because they make upfront payment feel more flexible and less risky.

Helping independent hotels and small groups use tech to build a healthier P&L, my bias, wishful thinking and true belief is that AI travel search is a treasure trove of untapped profitability for unique properties doing incredible things.

We're at a crossroads and this can go in either direction.And the answer depends on whether we, as an industry, do something to push it in the right direction. That's one of the main reasons why AI Hospitality Alliance exists.

As to who will benefit from AI search, it depends entirely on what hotels are willing to do. And by AI search, I mean mostly agentic search, not chatbot search. For the first time in forever, AI search via OpenAI or Anthropic will give hotels the opportunity to exploit a structural advantage (leveraging customer knowledge) that OTAs won't be able to match.