Major hotel group CEOs were all reading from the same script during their first-quarter earnings calls in recent weeks. Most described their use of artificial intelligence as a “competitive advantage,” but just how valid are these statements when everyone else is using AI?
Across the board, hotel groups called out technology investments, ancillary sales or better customer service.
Here are a few examples:
Christopher Nassetta, president and CEO of Hilton: “How we work with all the intermediaries, the dollars we can invest in our commercial engines and technology … I think we have a real competitive advantage.”
Anthony Capuano, president and CEO of Marriott International: “As AI platforms continue to enrich the trip planning experience, we believe our unparalleled depth of inventory and global reach are significant competitive advantages.”
Mark Hoplamazian, president and CEO of Hyatt: “If you combine advancements and facility with building platforms that have generated real impact to date—which we have—and become more and more practiced at the human elements required for that to generate value, that is where competitive advantage can be uncovered.”
Geoffrey Ballotti, president and CEO of Wyndham Hotels and Resorts described a series of AI initiatives, including its Connect platform, that were “creating a durable competitive advantage that we expect to compound as adoption continues to ramp.”
Commoditization of intent
A pattern has emerged, and on the surface most hotels appear to leverage AI in a similar manner. One analyst describes this as a “commoditization of intent.” In other words, not investing at scale in AI puts them at a competitive disadvantage.
“The major hotel brands tend to follow similar tracks with investment—even before AI was the buzz,” said Dorothy Creamer, senior research manager of hospitality and travel digital transformation strategies at International Data Corporation. “It’s not surprising that Hilton, Hyatt and Wyndham all make near-identical claims about AI investment in the same earnings cycle.”
AI mentions also make for good soundbites for investors, argued another expert. “Everyone is focusing on leveraging AI to increase efficiency,” said Paarul Suri, co-founder of AI visibility platform DominateAI, who previously worked at Hyatt, IHG and Placemakr. “That is a commodity, not a moat. Every brand is going to have it.”
She added that what hotels describe as AI is mostly applied to running their operations better: “That is a P&L problem. And that is a great problem for their shareholders. That is why they're talking about that in their earning calls, because it's important for their shareholders because it's making them more profit. But is it a durable competitive advantage?”
Floor Bleeker, consultant at In2 Consulting and former group chief technology officer at Accor, agreed: “Even if it's not a competitive advantage, you still need to do it because if everybody else is doing it, you're actually running behind. A lot of the boards are asking, hey, what's your AI strategy? Because obviously there's a lot going on.”
Speed to market
Clearly there is a lot going on. Hotels, for example, have been doubling down on launching apps on AI platforms. However, there are opportunities to use AI to gain an edge over competitors. Actually achieving competitive advantage depends on how well the hotel leverages its proprietary data, how much time a given implementation can save for staff—and, perhaps most critically, how fast it can be done.
For hotel groups that have already laid the AI foundations, IDC's Creamer believes the real differentiation now comes down to deployment speed.
“When they speak of competitive advantage, they're right in that it gives them a competitive advantage in the short term, especially when it comes to cost savings,” said Bleeker. “Look at call centers, for example. But how long will it take before your competition does that as well? Then it's not a competitive advantage anymore.”
As an example, Wyndham’s Ballotti mentioned during the earnings call that 5,000 hotels were using its AI-powered Connect platform, with 1,100 hotels in the U.S. using its Connect Plus platform, delivering a reported 300 basis points incremental direct contribution and 25% faster call handle times.
Behind this success is a centralized data platform, which Wyndham invested in early on, according to Bleeker.
“They definitely had a head start…” he said. ”Some of the others still need to get that data problem sorted before they can actually benefit from the AI. Wyndham will have a competitive advantage probably a little bit longer than the others.”
The quality of data is a must-have as well for any hotel building a competitive advantage, not least with agentic AI emerging as a future disruption. “Hoteliers must control their sources of truth to manage the disruption AI poses,” warned Robert Cole, senior research analyst, lodging and leisure travel, Phocuswright. “If not, another party will step in to fill that gap with a technology layer or tollgate to monetize it.”
Third-party dilemma
Back to Wyndham. It’s worth pointing out that its Connect Plus platform is powered by Canary Technologies, which also works with other hotel groups. This leads to another issue: Over time any unique advantages, like an AI voice assistant that handles inbound guest calls, eventually become democratized.
A recent IDC survey showed hotel respondents cite “influx of new and more nimble competitors into the market” as a top competitive challenge (36%) and “data issues” like a lack of visibility, accessibility and real-time data as a close second (28%).
“Democratized AI tools amplify these pressures as nimble independents are able to use affordable SaaS and can now move faster, and the data gap between franchise and independent is narrowing,” Creamer added.
Democratization also eventually impacts guest experience. “I know this is very philosophical, but if everybody starts buying everything off the shelf, basically everything becomes the same,” Bleeker said.
It’s worth noting, however, that Hyatt’s Hoplamazian also told analysts “no particular tool or platform should be seen as a durable competitive advantage.”
At the same time, some hotel groups encourage their technical and business teams to experiment with things like vibe coding and are producing prototypes, meaning less reliance on external platforms.
Cole has seen this innovation first hand, but has also witnessed the barriers hotels face. “The CEO loves it and is asking how quickly they can launch. Then, the CISO [Chief Information Security Officer] kills it due to security and guardrail issues. Finally, the CFO asks what the $20,000 spent with the LLM lab last week actually produced,” he said. “Formal processes linking concepts to deployment or cross-team collaboration are still being developed.”
The real advantage
Beyond how fast a brand can make AI produce results before others catch up, Suri believes hotel groups can build a competitive advantage by investing in search. She urges them to “open their eyes” and further invest in their technology so they can take advantage of AI search.
“Marketing was always an afterthought for hotels because the brand was there. Now it will become front of mind because if you're not there on those AI recommendations, you're out. You're not in the consideration set,” she said. “And if OTAs take that spot, you will continue to lose that 18% to 20%, or whatever you're paying to those OTAs. If hotels don't invest in their technology and they sleep on it, they will fall behind.”
As an example, she cited the “phenomenal” collaboration between Uber and Expedia. It’s a partnership with significant distribution implications for hotels. “They tied up. Why? Because their technology is great,” Suri added.
Meanwhile, hospitality brands should not lose sight of what makes them unique, which is the experience they offer the guest. And Bleeker believes a hotel can genuinely claim an AI-based competitive advantage through extreme operational efficiency.
“If you can actually operate your hotel at 30% less cost because you need fewer people, or people become smarter with this system, you have a competitive advantage because nobody else is doing it today,” he said.
Further ahead, the goal is for that hotel to offer an “amazing guest experience that is super personalized at scale” that in turn drives more loyalty, further lowering distribution costs and putting the power back into the hands of the hotel brand. “And I haven't seen much happening there,” Bleeker added.