How AI will revolutionise the hospitality industry in 2025

Jordan Hollander, co-founder at Hotel Tech Report

Embracing generative AI

Generative AI should be our primary focus this year. Similar to the early days of the internet, we’re at a pivotal moment where the dominant platforms of the future are still taking shape. What’s clear, however, is that generative AI will be a core driver of the technologies shaping tomorrow’s hospitality landscape.

The rise of personalised pricing

One of the most exciting trends I see on the horizon is personalised pricing. As AI-driven bots and agents continue to evolve, they will enable travellers to directly query hotel databases, unlocking tailored pricing and offers at an unprecedented scale.

While still in its early stages, I anticipate we’ll see the first consumer-facing applications emerge by the second half of 2025.

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New era of booking channels

Regulatory pressures on industry giants like Google and Booking.com, combined with the growing ubiquity of generative AI search, are paving the way for entirely new booking channels.

These channels will revolutionise how guests interact with your business, altering booking behaviours, lead times, and trends. As consumers gain more flexibility and agency in their travel planning, we will need to shape our strategies to meet evolving expectations.

Empowering small and independent properties

Historically, large chains had access to powerful revenue management tools and data-driven strategies that smaller players could only dream of. However, the rise of AI has leveled the playing field.

As an independent hotel, you now have the opportunity to implement advanced revenue management strategies such as personalised pricing, predictive analytics, and demand forecasting, without the need for vast resources. This is groundbreaking, not just for increasing efficiency, but also for staying competitive in such a saturated market.

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AI-enabled KPIs

With AI at the forefront, we need to evolve towards data-driven analysis and decision-making. I believe return on ad spend (RoAS) and labour expense will be two of the most critical metrics taking centre stage:

• RoAS: As new customer acquisition channels emerge, it will be essential to monitor RoAS at the channel level. AI will help us track and optimise the efficiency of these channels, ensuring marketing investments deliver strong returns.
• Labour expense: With staffing costs continuing to rise, we must focus on keeping these expenses under control. AI presents a significant opportunity to reduce costs by automating routine tasks and improving operational efficiency without sacrificing quality.

A dual strategy for AI adoption

The rapid advancements in AI present both opportunities and challenges. While AI holds massive potential, it also disrupts the status quo, forcing us to rethink operations and growth strategies.

To succeed, I believe we must adopt a dual strategy:

1. Invest in adaptive technologies: Focus on solutions that keep the business competitive in the short-term.
2. Allocate resources for innovation: Prepare for long-term opportunities by experimenting with emerging technologies and processes.

Balancing short-term growth with the agility to adapt to industry shifts, like new channels or evolving consumer expectations, will be critical.

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Rising tech spend and accelerated digitalisation

As AI continues to prove its value, I fully expect tech spend in our industry to rise this year.
Increasing labour costs will drive adoption of AI-driven automation to replace manual processes and improve efficiency. From streamlining data entry to delivering personalised guest experiences, AI will enable superior outcomes while reducing costs.

To encourage further digitalisation, we must prioritise the development of user-friendly technology. One of the main obstacles to adoption has been the complexity of hotel tech systems. By creating intuitive, accessible tools similar to the apps we use daily, we can make the value of these technologies clear and compelling.

Staying ahead

To stay ahead, we must lean into AI-driven strategies to drive efficiency, enhance personalisation, and fuel growth. Partnering with AI-focused tech providers and scrutinising our business processes to identify areas where AI can unlock value are essential for beating the competition.

Success this year requires agility, foresight, and a willingness to embrace change. Whether it’s reducing operational time, uncovering deeper insights, or improving results, those that prioritise AI will position themselves as leaders within the industry.

These insights are drawn from Duetto's 2025 hospitality trends report, which analyses factors set to impact the industry this year.