The Next Disruption Will Not Be a Cheaper OTA

I am not criticizing technology. Technology has transformed hospitality in enormously positive ways. It has improved forecasting, inventory management, communication, payment processing, personalization, and the speed with which hotels can serve guests. 

My concern is not with the technology itself. My concern is with what happens when the industry assumes that greater automation will inevitably lead to lower costs.  We have already learned that lesson once. Online travel agencies made the reservation process faster, easier, and more efficient. Yet the cost of acquiring the customer did not necessarily decline. In many cases, it increased. 

The technology reduced the work involved in processing bookings, but the companies controlling access to demand gained enough market power to charge hotels substantially more for reaching travelers. We are now approaching another major transition. 

Artificial intelligence will increasingly help travelers select destinations, compare hotels, construct itineraries, make reservations, request upgrades, arrange transportation, and manage changes during the trip. Eventually, many travelers may no longer begin their search with a hotel website, an OTA, or even a traditional search engine. They may tell an intelligent travel assistant: “Plan a four-night anniversary trip somewhere warm. I want excellent service, a quiet room, a good spa, and no large conventions.” 

The technology may evaluate hundreds of properties, examine rates and reviews, study the traveler’s history, compare loyalty benefits, negotiate available offers, and complete the reservation. That sounds wonderfully efficient. But the hospitality industry should be asking a very important question: Who gets paid when the artificial intelligence chooses the hotel?

New Technology Creates New Gatekeepers

The OTAs became powerful by aggregating inventory and consumer attention. Artificial-intelligence platforms may become even more powerful because they will not merely display choices. They may decide which choices the traveler sees first. That distinction changes everything.  

A traditional OTA presents a list of hotels and encourages the customer to compare them. An artificial-intelligence travel agent may narrow the entire market to three recommendations or perhaps one. Hotels may then find themselves competing not only for the guest’s attention, but also for the approval of an algorithm operating between the hotel and the customer. That creates a new form of distribution dependency. 

Properties may be required to pay for preferred access, enhanced data feeds, real-time inventory connections, verified content, priority placement, booking APIs, personalization services, or participation in artificial-intelligence marketplaces that do not yet fully exist. The commission may no longer be described as a commission. It may appear as a technology fee, connectivity charge, acquisition fee, subscription fee, performance payment, referral fee, data expense, or revenue-sharing arrangement. The name will change. The economic effect may not.

The Costs No One Is Fully Pricing Yet

The hospitality industry tends to focus on the visible costs of technology: software licenses, installation, or monthly subscriptions. The higher costs often appear later. Hotels will need cleaner, more accurate data because intelligent systems cannot personalize experiences with incomplete, duplicated, or outdated guest information. They will need stronger cybersecurity because increasingly connected systems create more points of vulnerability. They will need privacy controls, legal oversight, consent management, and clear policies governing how guest information is collected, shared, interpreted, and retained. They will need constant integration among property-management systems, central reservations, customer-relationship platforms, revenue systems, payment providers, loyalty programs, mobile applications, voice systems, and external artificial-intelligence tools. 

They will need employees capable of monitoring the technology, correcting its errors, protecting guests, and intervening when automation produces an incorrect answer. They may also need to pay to remain visible inside the systems travelers increasingly use. None of those costs are imaginary. And few are likely to remain static. A hotel may save money by automating one function, only to spend considerably more maintaining the digital environment required to make that automation reliable.

Technology rarely removes every expense. More often, it moves the expense to a less obvious place.

What Happens to the OTAs?

The online travel agencies are not standing still. They possess enormous inventories, years of consumer behavior data, sophisticated marketing capabilities, established payment systems, and millions of existing customer relationships. They will undoubtedly use artificial intelligence to make their platforms more persuasive, personalized, and difficult to leave. They may become less like booking websites and more like complete travel-management environments.

At the same time, artificial intelligence may also threaten the position they have built. A traveler using an independent digital assistant may no longer need to visit an OTA and scroll through dozens of listings. The assistant may search multiple sources, including hotel-direct rates, loyalty benefits, advisor programs, packaged offers, and alternative accommodations. That could weaken the traditional OTA model. Or it could make the largest OTAs even more powerful if they become the inventory and transaction infrastructure behind the artificial-intelligence assistant.

The future may not eliminate intermediaries. It may create intermediaries that are less visible to the customer and more deeply embedded in the transaction. That is why hotels must be very careful. The most expensive middleman is often the one the guest cannot see.

Luxury Hospitality Faces a Particular Risk

The consequences are especially important in luxury hospitality. Luxury is not simply the delivery of an accurate reservation. It is the interpretation of human expectation. A guest may request a quiet room, but what they really need is relief after a difficult week. A couple may book an anniversary package, but the significance of the occasion may be greater than the reservation record reveals. A returning guest may appreciate recognition, but not public attention. A family may appear demanding when they are actually anxious because they are traveling with an elderly parent or a child with particular needs.

These distinctions require judgment. Technology can collect preferences, identify patterns, and prompt an employee to act. Used properly, it can make the service more personal. But technology cannot be permitted to flatten every guest into a profile, a predicted behavior, or a revenue opportunity. The danger is not that artificial intelligence will become too intelligent. The danger is that hotels will use it as an excuse to become less human.

The False Economy of Removing People

Hospitality companies will inevitably be tempted to use technology primarily as a labor-reduction strategy. Some routine work should be automated. Employees should not spend valuable time repeatedly entering information that the hotel already possesses. Guests should not have to wait while staff members navigate disconnected systems. Technology should eliminate unnecessary administration and give employees more time to serve. But there is an enormous difference between using technology to support hospitality and using it to replace hospitality. Luxury guests do not pay premium prices to conduct the entire relationship through a screen. They may appreciate the option. They do not necessarily want it to be the only option.

Removing experienced employees may produce an immediate financial saving. The longer-term costs may include weaker guest recognition, slower service recovery, lower loyalty, reduced ancillary spending, poorer reviews, employee burnout, and the gradual loss of institutional knowledge. These costs do not always appear neatly on the monthly operating statement. They appear in the guest who does not return. They appear in the travel advisor who stops recommending the property. They appear in the employee who was never properly trained because the hotel assumed the system would provide all the answers. They appear when an unusual problem arises and no one on duty has the experience or authority to solve it.

A hotel can automate a transaction. It cannot automate accountability.

True Personalization Requires More Than Data

The industry frequently uses the word “personalization,” but personalization is not simply knowing that a guest prefers feather-free pillows. That is information. Personalization begins when the hotel understands why the preference matters and uses judgment in deciding how to respond.

Artificial intelligence may become extraordinarily good at identifying patterns. It may recognize that a guest usually requests a high floor, orders sparkling water, travels in February, or reserves a particular room category. That can be useful. But luxury service also depends on restraint. The guest may not want every known preference mentioned. They may not want a companion to know where they stayed previously. They may not want the hotel to demonstrate just how much information it possesses. The more data hotels collect, the more skillfully they must decide when not to use it. Discretion will become one of the most valuable forms of luxury. Discretion and Confidentiality have always been the promise of a hotel, but are often not understood or, worse yet, not learned by staff. Many years ago, I had the unfortunate situation of having to terminate a long-tenured front desk manager from a mobile travel guide: five-star hotel (aka Forbes these days) for breaching this protocol. He received a call at 7:00 am from a flustered wife of a hotel guest, who said she could not reach her husband. He left his desk, went upstairs to the room, and returned the wife's call, saying it didn't look like her husband had slept in the room that night. I won't even tell you what ensued from there, but it was not pleasant. 

The Landscape Will Change Completely

The next generation of hospitality technology will change how hotels are discovered, booked, priced, staffed, and experienced. It may reduce certain costs dramatically.

It may also create new expenses that OTAs, hotel companies, owners, and technology providers are not yet fully anticipating. There will be costs associated with data access, system integration, cybersecurity, privacy, algorithmic visibility, artificial intelligence distribution, training, oversight, and error correction at machine speed. There will also be an immeasurable cost if the industry allows convenience to weaken genuine service.

Hotels that treat artificial intelligence merely as a way to remove labor may become highly efficient and completely forgettable. Hotels that use it to reduce friction while strengthening human engagement may deliver a level of service we could only have imagined in the past. That is the real opportunity. Technology should remember the guest’s preferences so the employee can concentrate on the guest. It should anticipate operational needs so leaders can spend more time coaching their teams. It should simplify the transaction so the hotel can deepen the relationship. And it should lower barriers between the guest and the hotel, not create another expensive gatekeeper standing between them.

The future of luxury hospitality will not belong to the hotel with the most technology. It will belong to the hotel that uses technology intelligently without allowing it to replace judgment, warmth, discretion, and genuine care. The winners will combine machine efficiency with human intuition. Because no matter how sophisticated the booking process becomes, the guest will still arrive as a human being. And ultimately, another human being must make them feel welcome.