A Hotel’s Guide to the AI Age of Paid Advertising

Continuing my Hotel Commercial AI Optimization series, let’s talk about paid media. (I hope you have already read my post about websites.) Specifically: what happens to your Google Ads, Meta, and Programmatic budgets now that AI dominates the traveler’s trip-planning journey?

Spoiler: Some of your budget is working harder than ever. The rest is very quietly on fire! Grab a caffeinated drink if you like, and let’s dive in. You will really want to pay attention to this.

The Scary Numbers Agencies Are Not Putting in Your Monthly Report

Let’s start by understanding the seismic shift happening in the paid media landscape. You are likely not seeing much about this in your marketing agency’s beautifully formatted monthly slide deck. But the hotel paid media times, they are a-changing.

Alarm bells started ringing for large-scale paid media advertisers in 2025. Why? Click-through rates (CTR) for ads were collapsing. CTR has long been a crucial cornerstone metric for measuring the effectiveness of paid media campaigns, and it was imploding fast.

Seer Interactive tracked 25.1 million impressions across 3,119 queries over 15 months and found that:

  • CTR on queries where Google’s AI Overviews appear has fallen 68% from baseline.
  • Paid CTR dropped from 19.70% in June 2024 to 6.34% in September 2025.
  • July 2025 was particularly brutal: CTR dropped from 11% to 3%.

Now, your agency might not be necessarily hiding this data from you. At the same time, they are likely not volunteering information that makes their monthly retainer across hundreds of hotels look bad. 

Behold the Era of Zero-Click Search

Brace yourselves. Zero-click search is not just coming… it is already here!

According to SparkToro and Similarweb research, approximately 58.5% of U.S. Google searches now end without a single click to any external website. Since Google launched AI Overviews in May 2024, that number has accelerated quickly. Similarweb tracked a 13-percentage-point jump in zero-click searches in a single year. On mobile, it is way worse: zero-click rates are hitting 77% versus 47% on desktop, and as we know hotel searches skew heavily on mobile. Impressions (the number of times your ad is shown) stay high but clicks have stopped following them. 

This trend is very clearly visible in most Google Search Console dashboards right now. The real story for hotel marketers and owners is not the absolute number. It is the rapid speed of change.

Meanwhile your hotel’s cost per click (CPC) likely has not dropped, despite its more limited effectiveness. Why? Well, this is because as organic real estate shrinks, more advertisers compete for fewer and more expensive placements. This is how auction math works in Google Ads. Remember, Google is the house and the house always wins. 

A (not so) New Sheriff Arrives in Advertising Town!

The biggest news that changes things for hotels? Meta (Facebook/Instagram, also nostalgically referred to as “The Facebook” by me) is forecasted to overtake Google in global ad revenue in 2026, hitting $243 billion versus Google’s $239 billion (eMarketer).

Google’s growth is slowing to 11.9% while Meta’s is accelerating to 24.1%!  The market is repricing in real time and that tells you exactly where the leverage is moving when it comes to AI. Hotels need to pay some extra attention to the new king… until it eventually has to give up the throne.

Hotel Paid Media Channels: Deep Dive

I hope your caffeine is kicking in by now! Let’s now review specific channels to see what is changing for hotels and, more importantly, what you can do to improve your digital marketing strategy.

1. Google Advertising

Google has been steadily infusing AI into its ad products for years. They are shifting the model from keyword-centric to intent-centric. Here is what’s new in Google and how you can use it to benefit your hotel.

A. AI Overviews: New Landlord at the Top of the Funnel
Google’s AI Overviews now appear on roughly 13% of all U.S. desktop queries (SEMrush) and are far more likely to trigger with longer, more conversational searches. “Boutique hotels in Los Angeles with a cool bar” is exactly the kind of query that now gets you an AI-generated summary at the top of the page. No surprises here, as it is likely the most valuable query for a boutique hotel in Los Angeles.

When an AI Overview fires, paid CTR drops by more than 50% according to multiple independent studies. Guests who click through are increasingly decided. They have already done their research in ChatGPT, Claude, or Gemini. They are now comparing specific properties on price and availability and no longer just browsing for inspiration.

Running a traditional broad match keyword campaign to capture these guests is like hiring a Master Sommelier to sell someone a cheap beer they had already decided to order before they walked in the door.

Example:

Any boutique property in the Venice Beach/Santa Monica area running broad match on “LA boutique hotels” is increasingly buying clicks from guests who will bounce straight back to an AI tool to finish their research. That budget is better deployed on exact match brand terms, competitor conquest campaigns for comparable nearby properties, and high-intent transactional phrases like “Venice Beach hotel deals this weekend.”

Do this:

  • Audit your search terms report and pause any keyword that triggers informational intent.
  • Switch to exact and phrase match for your core campaigns.
  • Make your booking landing page earn the click with frictionless rate competitiveness. Your hotel website design needs to convert the high-intent guests who do click through.
  • Monitor your impression-to-click ratio. In a zero-click world, stable impressions are a vanity metric.
B. Google Performance Max & AI Max: Powerful Engines, But Read the Manual First
Performance Max (PMax) is Google’s fully AI-automated campaign that includes Search, Display, YouTube, Maps, Gmail, and Discover in a single campaign. It integrates directly with Google Hotel Center and automatically targets travelers who have demonstrated clear booking intent.

Meanwhile, AI Max with Smart Bidding (the shiny new product from Google) delivered an 18% increase in unique search query categories with conversions, and a 19% increase in overall conversions!

However, there is one catch: PMax needs conversion volume to learn, and it needs a lot of it. Some high-conversion-volume hotels with clean CRM pipelines are seeing real gains. The format can absolutely deliver, but it is not guaranteed. The gap between a well-fed PMax campaign and an underpowered one is enormous.

Example:

A 30-room boutique hotel in Miami with fewer than 200 tracked conversions per month does not have enough signal for the algorithm to optimize meaningfully. It will quietly include branded search traffic in its return on ad spend (ROAS) number that would have converted anyway. Garbage in, confident-looking report out. Big hotel marketing agencies love it!

Do this:

  • Run a structured campaign with controlled bidding while you build conversion volume.
  • Exclude branded terms; otherwise, it inflates its ROAS.
  • Feed it your best first-party CRM data, including past booker lists, and replace generic asset headlines like “Book Now” with room and location-specific copy.
C. Google AI-Generated Creative: Robots Writing for Robots

A real gift buried inside Google’s AI push is its new generative AI tools. These can help create compelling headlines, descriptions, and lifestyle imagery directly in Google Ads. Google is giving hotels the ability to generate and test hundreds of creative combinations of seasonal campaigns across multiple room types. All this can be done without briefing your (nice, but sometimes very moody) web designer!

Do this:

  • Test Google’s generative creative tools to expand your asset library, especially for PMax asset groups, where creative diversity directly affects algorithmic performance.
  • Pro tip: Always use the AI as a first-draft generator, not a final approver. Your brand voice still needs a human edit.  Always take one last look before the robots deploy anything.

2. Meta (Facebook + Instagram) Advertising

I never thought a day would come when the company I still refer to as “The Facebook” would overtake Google in global ad revenues. Your social media feelings aside, it is time to approach Facebook and Instagram ads with a little more strategy and seriousness.

Meta’s AI capabilities are turning it from an inspiration layer of travel planning into a hyper-personalized decision confirmation engine. After getting a property recommendation from ChatGPT, Claude, or Gemini, travelers immediately open Instagram to validate it emotionally. They scroll the feed, check tagged photos, and decide if the hotel looks as good as the AI described it, and whether real humans on social media agree. Here are some new tools that make advertising more effective on this “decision confirmation engine.”

A. Advantage+: Manual Audience Building Is Dead

Meta’s Advantage+ suite fully automates audience targeting and ad placements. Result? Advantage+ campaigns now average a $4.52 return for every $1 spent, approximately 22% higher than manually managed campaigns.

Yes, the robots are winning!

Do this:

  • Shift your Meta campaign objective from conversions to consideration.
  • Educate stakeholders that ROI magic is simply not going to show up in Google Analytics reports.
  • Optimize for landing page views, profile visits, and video views on your most immersive content.
B. Dynamic Travel Ads: The Polite Social Stalking Algorithm

Meta’s Dynamic Travel Ads use AI to retarget a guest with the exact room type they browsed but did not book.

Example: A guest who spent 5 minutes on the King Bed Suites page of a hotel in Miami and then closed the tab will see an Instagram ad showing that exact room the next morning.

Creepy? Definitely yes. Effective? Kind of.

Do this:

  • Run a dedicated retargeting campaign for guests who visited your website but did not book.
  • This is your warmest audience and one of the highest-ROAS plays in hotel paid media right now.
  • Build creative that confirms rather than sells: location, lighting, and the view. Real and specific beats over-polished and generic every time.

3. Programmatic and Display Advertising

AI is solving the programmatic industry’s biggest historical problem: wasted impressions on uninterested audiences. Unfortunately, it has also created a significant new problem: the hotel guest who did all their research in an AI tool and left no targeting breadcrumbs behind.

A. The Upside: Dynamic Creative Optimization (DCO)

DCO (Dynamic Creative Optimization) is a major upgrade for programmatic platforms, as they are using AI to analyze behavioral signals across billions of data points like flight searches, weather, local events, and past booking windows.

DCO is boosting CTR by an average of 32% and reducing cost per acquisition by an estimated 30% compared to traditional display ads.

Example:

A business traveler reading financial news on a Tuesday morning sees an ad highlighting a hotel’s proximity to the Miami convention center. A family browsing a travel blog on a Saturday afternoon sees the pool. Same property, same budget, dramatically different message.

B. The Downside: AI Research Leaves No Footprints

AI assistants generate no cookies or behavioral data. A guest who spent 20 minutes researching Miami hotels in ChatGPT is invisible to your programmatic targeting stack, showing up only as direct traffic and vanishing into the internet like Keyser Söze.

This is exactly why Meta’s social graph, not dependent on browser-based tracking, is growing at 24% while programmatic display budgets face increasing pressure to justify their returns.

Do this:

  • Restructure your display as a retention channel rather than a prospecting channel. Past bookers, loyalty members and website visitors with booking engine sessions are the right audiences.
  • Pressure-test your programmatic ROAS: if more than 20% comes from view-through conversions, your actual performance is lower than the analytics dashboard suggests. View-through attribution is the most generous and least reliable metric in display reporting.

Hotel Revenue Attribution Problem Is Getting Worse

Your hotel paid media attribution model is probably wrong, and AI is only making it worse. AI-referred research sessions generate no cookies, UTM parameters or referral strings. All these guests simply show up as direct traffic in GA4. These AI-orchestrated journeys are creating attribution gaps that traditional models cannot close. The result: you are over-investing in channels that close bookings and underinvesting in channels that create intent. Why? Because in old school marketing, closers capture all credit (and get the coffee).

Last-click attribution is once again destroying marketing. I wrote about this problem years ago and it hasn’t changed. In an AI-native world, tracking tools are becoming increasingly unreliable. This is going to be one of the hardest things for marketers, and it is already making them very unhappy. R.J. MacReady said it best in the 1982 masterpiece The Thing:

“Nobody trusts anybody now… and we’re all very tired.”

Example:

A guest who spent 20 minutes with Gemini, watched your Instagram Reels, compared rates on Expedia, and then searched your hotel name in Google clicks on a brand name ad and books the room. Google Brand Search conversion gets 100% credit. Gemini, Instagram and Expedia get 0%. Google Ads takes a bow and invoices you accordingly. 

Meanwhile, hotel owners and asset managers are still asking why you are spending on Instagram and Expedia Ads without a clear “ROI.” The very same painful conversations we had in the early days of Google continue into the age of AI.

Do this:

  • Educate your hotel stakeholders. Email them this article.
  • Move from last-click to data-driven attribution in Google Ads today.
  • Watch your direct traffic trend: a rise in direct traffic is increasingly a signal that AI is recommending you. It’s not just guests typing your URL from memory, as we used to claim in not so ancient times.
  • Revisit whether you view hotel marketing as a cost or an investment. In the AI era, the gap between those two mindsets is wider than ever.

Paid Media’s Future Inside AI

There is no free lunch. As AI platforms face inevitable pressure to show returns on their enormous infrastructure investments, there will be IPOs. Then the shareholders (just like they did with Google) will immediately demand profits. The new banana company will be arriving again and it will be asking you to pay for placement… just as Google did in the early 2000s and then Facebook and then Instagram (Meta).

I’m sure you have heard that AI is very expensive to run and someone (eventually) has to pay the bills. The signs are everywhere but soon there will be ads within your favorite AI:

  • ChatGPT launched its self-serve advertising platform in May 2026, opening AI-native ads to businesses of all sizes for the first time.
  • Google is already testing ads inside AI Mode and AI Overviews, which now reach over 2 billion monthly users across 200 countries (BookAssist).
  • Google announced $175 to $185 billion in capital expenditure for 2026. That’s nearly double its 2025 spending! Most of it is going toward AI infrastructure, and they will need to show returns to shareholders…you can see where this is going.

The hotel paid media playbook has been rewritten twice before: when Google Search ads arrived, then when Meta opened its ad platform. Both times, the hotels that moved early captured more bookings, revenue and market share. AI platforms are following the same arc, just much faster. The inventory is live and the auction is forming!

For hotels, the format will feel less like a banner ad and more like a concierge recommendation. A guest asks ChatGPT: “Best boutique hotel near the Colosseum for October?” The AI returns a shortlist. One property appears as a sponsored “featured option,” labeled and placed at the exact moment of decision inside a personalized conversation. That is a very different kind of placement from a search results page.

Do this:

  • Improve these today: review volume, structured data quality, and bid strategy.
  • Make sure your website is AI-ready. AI placement will not be owned by those with the biggest budgets but those whose digital presence is machine-readable.

Time for a quote:

The organic AI recommendation work you do today is the foundation for paid AI placement tomorrow.

– Vikram Singh

Conclusion

The hotel industry rewired its paid media and advertising strategy when Google arrived, and then rewired it again when social media advertising launched. Early movers built advantages that took competitors years to close. The hotels that recognize and embrace this new leverage will hold the same structural advantage that early adopters captured when the paid media era began in the early 2000s.

AI is not eliminating paid media expertise. It is shifting the leverage points toward channels and formats that are less familiar and harder to measure. Mass produced marketing campaigns are out. It’s time to invest your time and money with the right people in order to succeed in your hotel’s marketing efforts.

The window to move first is open. It will not stay that way.


Sources

Seer Interactive: Google AI Overview Study — SEO & PPC CTR Impact (September 2025 update)
eMarketer: Digital Ad Spending Forecast H2 2025; Meta to Surpass Google in Digital Ad Revenues (April 2026)
IAB: 2026 Outlook Study: Ad Spend, Opportunities, and Strategies for Growth (January 2026)
Semrush: AI Overviews Impact on Search in 2025 (March 2025)
SparkToro/Datos & Similarweb: Zero-Click Search Studies (2017–2025); Similarweb Zero-Click Acceleration Report (May 2024–May 2025)
Bookassist: Google’s New AI Ads — What Hoteliers Need to Know (December 2025)
Alphabet / Google: Q4 2025 Earnings and 2026 Capital Expenditure Guidance (February 2026)

A Simple Checklist to Make Your Hotel Website AI-Friendly

Following up my last post on AI and hotel commercial optimization, I want to share some insights on how to make hotel websites discoverable to the newest wave of robots.

As we move further away from Google search results pages into AI conversations, the challenge has shifted from findability to extractability. If AI can read your website and understand what you offer, then there is a good chance it will confidently recommend you to the right traveler at the right moment.

It is important to note that AI results are about as inconsistent as Google Search was in its early days. Improving AI is not a hotel’s job. There are billions of dollars getting poured into that. All you need to do is continually make sure that your hotel content can be consumed by AI.

The Guest Journey Has Changed

A traveler planning a long weekend in Miami no longer opens twelve browser tabs, cross-references review sites, and digs through OTA listings. They open ChatGPT, Gemini, or Perplexity and ask: “What’s the best boutique hotel in South Beach for a couples trip?” In seconds, AI delivers a curated, confident answer drawn from everything it has absorbed across the web. No search results page. No ads (yet). Just a clear recommendation.

This is the new discovery moment. If your hotel isn’t represented in the content AI can read, you simply don’t exist in that moment. Think of it like the second page of Google results, which was jokingly referred to as a great place to “hide a dead body” because nobody goes there. A classic dad joke, and I’m fully here for it.

AI assistants are increasingly embedded throughout the trip-planning process: suggesting destinations, comparing properties, summarizing reviews, and handling bookings directly. Major OTAs are racing to integrate AI into their products. Google’s AI Overviews are already reshaping how hotel search results appear. The guest journey is being rewritten in real time.

At the center of all of it is your hotel website, which also happens to be the only thing you can control. The questions every hotel should be asking right now: Does your website actually work for an AI visitor? Is it AI-friendly and accessible? Does the information that AI needs in order to recommend you exist in a format it can read?

Know Your AI Visitors

Before diving into the checklist, you need to know that you have two distinct types of AI visiting your website.

  • AI Bots (Web Crawlers for Model Training)
    These crawlers visit massive swaths of the web to gather training data. Unlike the traditional search engine crawler (like GoogleBot), which gathers data for future retrieval and ranking, AI crawlers (like GPTBot) collect data for knowledge and language reasoning. They’re building a picture of your hotel that may inform recommendations now and in the future.

  • AI Agents (Task-Oriented Virtual Visitors)
    These are virtual visitors using simulated browsers, keyboards, and cursors to complete a task. That task might be to compile a research spreadsheet of possible hotel partners, or it might be to submit a booking form. Agentic AI is still young, but it’s growing fast. It will be a significant part of your traffic picture sooner than most hoteliers expect.

AI Optimization Checklist

There are things you can do right now to stay on track for current and future AI discoverability. In this post, let’s get started by outlining six steps for optimizing your hotel’s cornerstone digital asset: your hotel website. 

1. AI Does Not Understand Hotel Speak

AI is sold as an all-knowing oracle. In practice, it reads your hotel website like a very literal-minded intern who just started today. Counter to the keyword-focused era of Google SEO, AI doesn’t care about keywords or adjectives. It only cares about specifics.

Most of our hotel websites are currently being built by a small cluster of vendors. A lot of them have the same keyword stuffed and adjective-heavy headers, followed by sparse bullet points and drone video shots. Less content and bigger images became the new beautiful in recent years. Unfortunately, it has made many of our websites useless for the new breed of robots looking for a specific kind of factual information.

Consider how these two hotels perform when an AI is asked to recommend “the best boutique hotel in South Beach.”

Hotel 1: “Escape to Neon Paradise. Experience the heartbeat of Miami. Where Art Deco glamour meets modern luxury, and the ocean breeze whispers through the palms.”

Hotel 2: “The Beachcomber: 4-star oceanfront boutique hotel at 1198 Ocean Drive, South Beach. 50 ocean-view suites with king beds, high-speed Wi-Fi, and rainfall showers. 5-minute walk to Lummus Park. On-site Mediterranean restaurant, rooftop bar, heated pool, and daily beachfront yoga. Fully ADA-compliant and pet-friendly.”

Hotel 2 wins in every scenario. AI can’t catch “the feels” from your website. It needs location markers, factual amenity descriptions, and language it can extract and use.

You need to audit your key hotel website pages and make sure the following are written in plain, direct language:

  • Every service you offer
  • Who you serve
  • Your precise location and nearby landmarks
  • Credentials, certifications, and affiliations
  • Detailed descriptions of room types, dining venues, spa offerings, and meeting spaces

Please note: AI’s opinion of your hotel doesn’t stop at your website. It also trains on press coverage, OTA reviews, and social media. A great website is necessary, but your entire digital footprint is on trial. Stay tuned, as we will discuss all of these topics in future articles.

2. AI Cannot See Your Hotel Website Images

Hotel website vendors have largely shifted their focus to showcasing beautiful photography over content. Sadly, AI bots don’t look at pictures (yet). They read the text around them. Even awards, certifications, and key selling points (Forbes, Conde Nast, etc.) displayed on the website as images are effectively invisible to AI. The fix is straightforward:

  • Add Alt text on every image (like old school SEO).
  • Add supporting body copy that puts into words what the image is showing.
  • Any award, certification, or credential that exists only as a graphic will need to also exist as actual text somewhere on the page.

Photos remain essential for your human visitors; that doesn’t change. We just need to make some content adjustments to stay discoverable to the new army of robots.

3. AI Cannot Watch Your Hotel Videos

I’m old enough to remember the drone video invasion that swept hotel website homepages a decade ago. Load times be damned, design agencies went all-in on homepage drone footage with zero text. Many of the websites were stunning. But as someone who actually reads content…I was quietly disappointed.

Fast forward to today, and it turns out AI shares my frustration. It can’t extract meaning from video footage. It can read text wrapped around it, and it can try to digest the spoken words. Here is how to make your videos talk to AI effectively:

  • Narrate Bookable Details, Not Just Vibes:
    Talk about room types, bed configs, gym equipment, F&B outlet names. Then a guest asking AI “which hotel has a Peloton gym and a rooftop bar?” will get an answer. If it isn’t said on camera, it doesn’t get recommended.

  • Chapter Videos Like a Pre-Booking FAQ:
    AI reads chapter headings and can send guests directly to their answer. Try something like this:
    0:18 – Workspace & Wi-Fi 
    0:45 – Fitness Center 
    1:10 – Dining Hours 
    1:45 – Meeting Spaces

     

  • Upload Your Own Transcript:
    Auto-captions mangle hotel language. “The Founder’s Suite” becomes “founders sweet.” A clean .srt file means every room type and brand name is spelled correctly and properly indexed.

  • Bonus Quick Fix for YouTube Videos
    Click Show Transcript,* copy the text, and post it on your website as a companion page or collapsible section. That turns invisible video content into readable, indexable text instantly.**


    * This is only a shortcut. I recommend using a human-verified transcription for accuracy.
    ** YouTube has a setting that lets AI train directly on your channel’s content. Go to Settings > Channel > Advanced Settings. One click opens the door for AI to index everything you’ve ever published.

4. Build an AI Training Page

Think of it as a How to Train Your Dragon scenario… except the dragon is an AI LLM (large language model) and you’re trying to get it to recommend your hotel to guests.

Step 1: Create a dedicated “AI Information” page and link to it from your footer. This becomes your hotel’s structured briefing for machines. Everything goes here: location details, room specifications, dining concepts, accessibility features, nearby attractions, brand affiliations, awards, sustainability practices, etc. No marketing fluff, no adjectives. Write it for a robot, not a human.

Step 2: Layer in schema markup. Structured data tags break your content into labeled categories like address, room types, amenities, price range. This is something AI systems can parse without guessing. Direct evidence that LLMs read schema is still emerging, but hybrid systems like Gemini and Perplexity lean on search engine indexing as part of their process. Since search engines absolutely use schema, I think this step is worth doing.

Pro tip: Why not use AI to build it? Ask ChatGPT, Claude, or Gemini to draft this page for your hotel. AI-written content optimized for AI comprehension is a delightfully circular solution. Cue in the circle of life, Lion King.

5. Mo’ JavaScript, Mo’ AI Problems

Many hotel websites are simply too fancy for their own good. There are text elements that only appear when a visitor clicks, hovers, or scrolls. Magical, hidden dropdowns, an accordion/hamburger nav, a tabbed panel…basically built to be hidden from AI crawlers.

LLM crawlers generally don’t execute JavaScript. They only read the raw HTML that your server delivers on the first request. If your essential content (ex: room descriptions, location details, dining hours, etc.) only loads after a user interaction, please be aware that AI may never see it!

This process will likely improve as AI infrastructure matures and billions of dollars continue to pour into the technology. However, the best practice right now is to minimize JavaScript-dependent content delivery wherever possible. What’s good discipline for traditional SEO remains good discipline for AI optimization. Read the manuscripts, they already exist! 

6. Track Your Website AI Traffic

Once your hotel is indexed and referenced by AI systems, you’ll want to know which platforms are actually sending guests your way. Set up your Google Analytics (GA4) properly and go in with realistic expectations. Perfect data tracking isn’t on the table, and I don’t see it happening for a while.

What you can see:
Traffic from browser-based AI apps like ChatGPT, Perplexity, Gemini will often appear as Direct traffic in GA4. Building a custom exploration report to isolate AI referral sources is a very useful starting point. It’s imperfect, but informative.

What you cannot see:
AI Agents browsing your site on behalf of a guest don’t show up in GA4 at all. Unlike Cookie Monster, AI agents don’t accept cookies. They research, compare, and shortlist hotels without leaving a single trackable footprint. This is a genuine ghost in the machine and the analytics industry hasn’t solved it… yet.

Tracking what you can builds a baseline. As AI referral traffic grows, even imperfect data will reveal which platforms are driving discovery and whether your optimization efforts are moving the needle. With both Perplexity and Chat IPOs on the horizon, you know paid ads and placement cannot be far behind. 

Measurement infrastructure for AI-driven hospitality traffic is still being built. Get into free GA4 now, document your baseline, and you will already be ahead of every competitor who waits until the data is “cleaner.”

Conclusion

The hotel industry went through the same kind of reckoning in the late 1990s when Google arrived and hotels had to learn to write for a machine. Many resisted, but the ones that adapted early thrived. A new wave is now underway. Our challenge has shifted from findability to extractability. The good news is that the fundamentals haven’t changed: be present, be structured, and be specific. Don’t hide important information in formats AI can’t read. The manuscripts are already here… the only question is whether your hotel reads them in time.

100 Years of Solitude: AI and Hotel Commercial Optimization

I knew at some point I would be writing about how AI is changing the hotel and travel commercial optimization world. Again. Why again? Because history is repeating itself.
 
When I think about what’s happening in hotel and travel marketing right now, it reminds me of Gabriel García Márquez’s One Hundred Years of Solitude. (In my opinion, one of the best books ever written. I highly recommend it.) Here’s a short summary of the book, so you can get a feel for what I’m trying to share.
 
In García Márquez’s masterpiece, the Buendía family spends a century repeating the same mistakes. Generation after generation, men named José Arcadio chase the same obsessions and make the same catastrophic choices; at the same time, they are convinced that they are doing something entirely new. The fictional town of Macondo rises, flourishes, and crumbles. At the very end, the last surviving Buendía finally deciphers the ancient manuscripts that predicted it all. The tragedy was not that their fate occured. It was fact that it was avoidable.
 
Likewise, we have all been at this technological crossroad before. The technology is different, but the fundamental challenge is identical. A new system has arrived that will quickly dominate the way travelers research and discover hotels. The system runs on information. Hotels that feed it the right information in the right format will get recommended. Hotels that don’t will be lost.
 
Folks, we already did this with Google in the late 1990s and early 2000s. The manuscripts are there (just scroll back to my older blog posts). We just need to read them.
 

September 4, 1998

 
In 1998, the internet was new and chaotic, and nobody in hospitality knew what to do with it. Hotels had websites (if you could call them that): static pages with a phone number, and maybe a jpeg of the lobby that took two minutes to load on a dial-up connection. The idea that a traveler might book a room through a website seemed absurd… that’s what travel agents were for!
 
Then came Google. And everything changed.
 
Suddenly there was a system, and an all-encompassing algorithm that provided a bridge (or a barrier) between the hotel and the traveler. The algorithm didn’t care how beautiful your printed brochure was, how many years you’d been in business, or what your general manager thought about your property’s reputation. It read your website. It counted your words. It looked at your structure, your links, your load speed, your metadata. And based on what it found, it decided whether or not to send travelers your way.
 
The hotel commercial optimization professionals who grasped this early did something that felt deeply counterintuitive at the time: they started writing for a machine! They optimized page titles and header tags. They built content around the specific phrases travelers were typing into search boxes. They structured their websites not just to look good to human eyes, but to be readable, “crawlable” and “rankable” by digital spiders that had never stayed in a hotel and never would.
 
What about the hotels that ignored it? They still received bookings from offline channels and online travel agencies (OTAs). OTAs have always been the largest investors in technology, as they do not have any real assets to maintain and pay for. The hotels that thrived were the ones who were willing to take the leap and join the new world.
 

The Banana Company Arrives… Again

 
In One Hundred Years of Solitude, the banana company arrives in Macondo with promises of prosperity and modernity. It transforms the town,  bringing electricity, railways, and a new kind of commerce. It also reshapes everything around its own needs, on its own terms, whether Macondo is ready or not.
 
The AI revolution in hotels and travel feels a lot like that arrival. ChatGPT launched to the public in November 2022. Within months, millions of people were using it to plan trips. By 2024, Google had integrated AI Overviews into its search results. That means that for many hotel-related queries on Google, Gemini is generating the answer directly on the results page. Perplexity, Microsoft Copilot, and Gemini are all training on existing web content and delivering hotel recommendations with confident, authoritative directness.
 
Traveler behavior reinforces this story. Fewer clicks, more answers. Less browsing, more asking AI. The question has shifted from “hotels in Barcelona” to “find me the best design hotel in Barcelona’s Gothic Quarter for a solo traveler who wants walkability and a rooftop bar.” That’s not a simple search query…that’s a conversation. And AI answers it in one response.
 
The discovery moment has moved. It now happens inside an AI conversation, not on a search results page. The hotels that show up in that conversation are the ones that have given AI what it needs to understand them.
 
Sound familiar? It should. 
 

The Patterns Are Already in the Manuscripts

 
The Buendías didn’t see what was happening, even though the answers were right under their noses. Melquíades left manuscripts in the house that contained the entire history of the Buendía family: every birth, every death, every mistake. The tragedy was that nobody translated them until it was too late.
 
The secrets of technology-driven optimization for hospitality and travel are similarly well-documented if you know where to look. The same pattern has played out three times now with increasing speed.
 
Wave One: The Website (Late 1990s)
Hotels had to build a digital presence from scratch. The challenge was digital existence: getting online, making information available by creating a basic web infrastructure. The winners were the early adopters who took the medium seriously before their competitors did. 
 
Wave Two: Search Engine Optimization/Paid Marketing (Early 2000s–2010s)
Having a website was no longer enough. It had to be findable. The challenge shifted to figuring out how to  structure your hotel’s online content so that Google’s crawlers would read it, rank it, and serve it to travelers at the right moment. This is when keywords, metadata, page structure, and link building became core marketing disciplines for hotels (otherwise known as search engine marketing). When that was not enough, Google Ads (paid media) provided a new superhighway to success; the smartest hotels participated in both organic and paid marketing efforts to maximize their exposure and revenue.
 
Wave Three: AI Optimization (Now)
Being findable on Google today isn’t enough. Now you have to be intelligible to AI. The challenge has shifted again, only this time to extractability. AI systems need to read your website and understand it with precision: what you offer, where you are, who you serve, and why someone should choose you. The hotels that crack this code will be the ones AI recommends. The rest will be invisible in the new discovery moment. 
 
Each wave has required writing for a new kind of reader. In 1999, that reader was a human with a modem. In 2005, it was a search crawler (GoogleBot). In 2025, it is a large language model, agentic AI. 
 
The fundamentals of each wave are strikingly similar. Be present, be structured, and be specific. Give the system what it needs to understand you. Don’t hide important information in formats the system can’t read. In my experience, the hotels that struggle in each new wave are almost always ones who built beautifully for the previous wave and then forgot to adapt.
 

What AI Is Actually Reading — And What It Can’t

To optimize for AI the way previous generations optimized for Google, you have to understand how AI reads. Simple answer: it reads like a very thorough, very literal research assistant who has never visited your hotel and has no patience for poetry, adjective-heavy word salads, or “good vibes” content.
 
AI training bots (GPTBot,  Google’s Gemini crawlers, etc) scrape the open web and ingest text. They build their understanding of your hotel from whatever text they can find: your website, your press coverage, your reviews, mentions on travel blogs, OTA listings, social media posts. They assemble a picture of your property from all of it, based on what they can actually read and process.
Here is what they cannot process (yet):
  • Images without text descriptions
  • Videos without transcripts
  • Text that only appears after a JavaScript interaction
  • Information locked inside PDFs or interactive widgets
If your hotel’s most compelling selling points live in a drone video on your homepage with no accompanying text, AI doesn’t know about them.
 
I am old enough to remember that hotels had a similar issue with early search engines. Google couldn’t read Flash or index images. Hotels that built their entire websites in Flash (and many did) were effectively invisible to search. All hotels over time fixed that. Now, all hotels will need to adapt to the AI equivalent. 
 
Hotel content is moving from the traditional keyword stuffing festival to AI-friendly, very specific and factual content written in plain language. We are going to move away from content such as “nestled in the vibrant heart of the city” to “located at 45 Park Lane, a four-minute walk from Hyde Park and eight minutes from the nearest Tube station.” In Food and Beverage, we will move from “an unparalleled dining experience”  to “our restaurant serves modern European cuisine and is open for breakfast, lunch, and dinner, 6am -10pm, with a dedicated tasting menu available Tuesday through Saturday.”
 

Time to get my quote in:

“Adjectives don’t train AI. It feasts on facts.”- Vikram Singh
 

The Ghost in the Machine: Agentic AI Age

Even as I write this, I can see a wave of technology that goes beyond anything we have seen to date. This is where hotel owners need to pay very close attention, because it will change not just how travelers find hotels, but also how they will interact with them in the very near future.
 
An AI agent is not a search engine or a chatbot. It is a system that takes instructions from a human and then acts in the world to fulfill them autonomously and across multiple steps using real tools. An AI agent can browse the web, fill out forms, send emails, make reservations, and complete transactions. It operates a virtual browser with a virtual keyboard and mouse, navigating websites the way a human would, except faster, more literally, and without the patience to decode ambiguous interfaces, scrolls and images.
 
The implications for hotels and travel are profound. Right now, a traveler might ask an AI: “Find me a four-star hotel in Lisbon available the week of June 15, with a rooftop pool and breakfast included, and book the best value option under 300 Euros a night.” The current generation of AI assistants would research and present options for the person to book. The next generation will research it and complete the booking… if your website’s booking engine is navigable by an automated agent. Otherwise, they will find another hotel, or another way to book that may include fees for your hotel.
 
The travel agent visiting your website on behalf of a future guest is not human. It will not respond to atmosphere or beautiful photography. It is looking for machine-readable information + functional booking path. If it encounters a JavaScript-heavy booking widget that requires cookies, a hover menu that doesn’t render without a mouse, or a rates page that loads dynamically…game over. It will not send you an email. It may simply move on to the next comparable property.
 
Early agentic systems are already operating. The infrastructure is being built at warp speed. The hotels that have clean, structured, machine-readable websites with clear booking paths will have a natural advantage when agentic AI goes mainstream. The ones that built elaborate interactive experiences for the human eye may find themselves bypassed entirely.
 
In the fictional town of Macondo, those with the most elaborate houses were were often the ones least prepared when the world changed around them. Stay nimble, move fast.
 

Optimization Is a Permanent Discipline

After almost 30 years of working in commercial optimization, I am reading and learning even more today than when I started. There is no final destination in this business. Hotel revenue optimization is a permanent discipline that requires ongoing study, as things are always in flux.
 
In  García Márquez’s novel, Macondo’s decline wasn’t inevitable. It was chosen, one small failure to adapt at a time. Hotel commercial optimization has its own version of this danger. 
 
Every wave of optimization has been about the same thing: giving the gatekeeper system what it needs to understand and recommend you. In 2000, that gatekeeper was a search engine ranking algorithm. In 2025, it is a large language model. In 2030, it will be something else we can’t yet fully describe.
 
Hotels that thrive over time share a common orientation: they take the new mediums seriously. They don’t wait for the technology to become mainstream before they adapt. They read the manuscripts early. 
 

Conclusion

At the end of One Hundred Years of Solitude, the last Buendía finally deciphers Melquíades’ manuscripts. But we are not at the end of our story. Hotel marketers are holding the manuscripts right now. The pattern of technology-driven optimization is recognizable. We know how this wave works because we have watched previous waves. We know that AI is transforming travel discovery because the traveler behavior data is already showing it. We know that agentic AI is coming, because the infrastructure is being built in plain sight.
 
The question is not how AI will reshape how hotels are found and booked. The question is whether your hotel will continue to rise to the occasion, one wave after another.
 

The important lesson here is to always be present and paying attention. To quote the legend himself:

“It’s enough for me to be sure that you and I exist at this moment.” — Gabriel García Márquez
 
 
 

Superstar Hotel Asset Managers: Are You Working With One?

In almost three decades of working in hotel commercial optimization, I’ve been fortunate to work with some of the world’s greatest asset managers (AMs). I’ve had a front-row seat while they launched new hotel brands, rebranded legacy properties, and turned around struggling hotel assets. They made impossible real estate transactions seem easy and turned completely lost hotels into profit-making machines.

On the flip side, I also encountered a few well-intentioned asset managers who inadvertently sabotaged the hotels they were meant to optimize. Of course, it is the disaster hotel projects that have taught me the most. Nothing teaches like failure: you employ the same winning strategies and work just as hard, but unfortunately end up with a completely different outcome.

In the hotel real estate game, an asset manager either drives exceptional value or becomes the biggest obstacle to success. They’re the critical link between operations, commercial efforts, finance, brands, banks, and owners. Heavy is the head that wears the asset management crown.

Let’s start with two hard facts.

Hotel Operations Are Getting More Expensive

Labor, insurance, and utilities are skyrocketing globally and drastically changing the economics of running a hotel. Labor costs have increased 20% to 30% since 2019, while insurance premiums have gone up 2X or even 3X for properties in some regions. Energy costs remain volatile, and tariff/supply disruptions have driven up the cost of everything from linens to cleaning supplies.

Chasing top-line revenue these days, while ignoring acquisition costs and the expense of servicing those newly acquired guests, is a race to the bottom. Every guest comes with incremental costs (housekeeping, utilities, amenities, wear and tear, etc). Then there are acquisition costs (paid media ads, OTA commissions, etc) that were needed to compete and capture demand in the first place. Margins are eroding top-line growth so much that even when revenue is up, it feels like you are building a sandcastle on the beach at high tide.

NOI Is King

I learned this lesson early from one of the industry’s asset management legends. Back then, I was obsessed with revenue growth, outpacing the competition, and celebrating top-line wins. During one project, we replaced a prominent brand at a major city-center asset and executed it perfectly. Revenues soared! I was flying high and then the AM told me something life-altering:

“Vikram, this business is all about NOI. Nothing else matters.”

The best asset managers understand that Net Operating Income is the only metric that truly counts. Vanity metrics like ADR (Average Daily Rate) and RevPAR (Revenue Per Available Room) mean nothing if they don’t flow to the bottom line. It’s like bragging about your gym session while eating a sleeve of Oreos.

Even EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) can be massaged through accounting tricks. NOI hits differently. It’s the unvarnished truth of operating performance; it dictates cap rate and terminal value. Rational buyers don’t pay for good vibes, top-line revenue, market share, or five-star reviews. They buy cash flow. Period.

Top 6 Traits of Great Asset Managers

Great asset managers operate differently. They are exceptional because they are:

1. Chief Troubleshooting Officers

When crisis hits (and in hotels, it always does), great asset managers don’t panic, deflect, or wait for someone else to fix it. They step in and make the right calls.

I’ve watched them operate during natural disasters, lender meltdowns, team implosions, and other crises that would paralyze lesser mortals. No finger-pointing. No useless committee meetings or elaborate emails…just clear-headed decision-making under pressure.

When the proverbial “s*itstorm” hits,  they manage the crisis, fix problems, and then position the property to emerge stronger on the other side.

2. Messengers of Reality

Great asset managers tell owners the truth about their asset. No “glazing,” as the kids say these days! They definitely do not fuel “we’re the greatest hotel in the world and there is nobody like us” delusions.

If the elevators sound like they’re auditioning for a horror movie and the carpet hasn’t been replaced since the Obama administration, they’re not going to be presenting a luxury hotel budget. They explain to the owners that you can’t charge $500 a night for a property that smells like a mix of wet dog, nostalgia, and teen spirit.

They keep post renovation expectations grounded. An asset refresh does not equate to the discovery of the lost city of Atlantis when you’re writing press releases.

When major capital investment is genuinely needed, they fight for it with data and realistic projections that make owners reach for their checkbooks. When capital investment is not feasible, they right-size expectations and find creative ways to compete within the asset’s current reality.

3. Protecting Margins Like Their Life Depends on It

Great asset managers obsess over the unglamorous details that others ignore: laundry contracts, valet costs, energy procurement, insurance renewals, technology stack efficiency, and vendor consolidation.They know small line items can quietly erode profitability like termites in the foundation. A outdated/bloated tech stack here, an auto-renewed contract there—death by a thousand small cuts.

While everyone else is hypnotized by top-line revenue, great AMs are in the weeds ensuring that the bottom line doesn’t hemorrhage cash. These days, effective cost management is key to delivering NOI. 

4. Empowering, Not Micromanaging

Great AMs trust their operators to operate and their commercial teams to drive revenue. They set clear KPIs, remove barriers, provide resources, and then do something amazing: get out of the way.

They understand their job is to create conditions for success, not to cosplay as the GM, revenue manager, or marketing director. They don’t need to approve every decision, be cc’d on every email, or weigh in on whether the lobby should have red or yellow flowers on Tuesdays.

They hire smart people, give them the tools and autonomy to succeed, and hold them accountable to outcomes, not processes. When wins happen, they amplify rather than claim credit. In return, the hotel teams move faster, innovate more, and stick around longer.

5. Making Hard Decisions

This is where great asset managers truly separate themselves: they make the painful calls everyone else wants to avoid.

When the numbers say it’s time to exit a failing management contract, they don’t kick the can down the road for another quarter. Instead, they pull the trigger, own the decision, and manage the transition. When a vendor relationship has turned toxic or a key team member isn’t performing despite multiple chances, they don’t hope the problem fixes itself. They act.

Likewise, when they have to deliver bad news to ownership (ex: market reality has shifted, renovations are needed), they never throw the team under the bus to save face. They take ownership, explain what changed, present a clear path forward. They protect their team’s credibility while solving the problem.

6. Catalysts, Not Oversight Overlords

Great asset managers create energy in the room. When they walk into a strategy session, the team doesn’t reach for excuses—they reach for their best ideas. People lean in instead of checking out.

They show up to catch people doing things right and amplify it. They celebrate wins genuinely (no cringe-worthy “yay team” stuff).  They dissect losses without blame, and constantly ask: “What can I do to help?”

This isn’t some soft-skills fluff…it’s strategic leadership that directly impacts NOI. Engaged teams will innovate. Empowered revenue managers deliver stronger yields. Empowered sales directors close more business. Operations teams that feel trusted take ownership of problems instead of hiding them until they metastasize into mega disasters.

Micromanaged, anxious employees deliver the minimum to avoid getting yelled at. Great AMs know you can’t fake genuine hospitality, and you cannot terrorize people into excellence.

Top 6 Traits of Mediocre Asset Managers

For every great asset manager driving real NOI growth, there are many others who live for reports, set too many meetings, and somehow leave the property worse off than when they arrived. They are what Bill Murray would call “mediocre talent.” Mediocre AMs:

1. Over-Promise and Under-Deliver

This is the most dangerous trait: they create a fantasy for ownership that has zero basis in reality.

They specialize in building budgets designed to make owners swoon during the approval meeting. They end up promising things like 20% or 30% revenue growth in a year when the hotel is undergoing renovations or when the economy is softer than the hotel pillows!

When reality inevitably arrives, they blame everyone but themselves: the GM didn’t execute, the commercial team underperformed, rates were either too aggressive or not aggressive enough, the weather didn’t cooperate, Jupiter wasn’t aligned, Mercury was in retrograde, etc.

The result? Ownership loses faith in the entire team, team morale fizzles out, capital allocation gets frozen, and the property falls further behind because no one knows what numbers to trust anymore. It’s that “Highway To Hell” that ACDC talks about, filled with Excel spreadsheets of broken dreams.

2. Obsess Over Meetings

Some asset managers believe progress is measured in hours spent in meetings. Their calendars look like Tetris on expert mode: daily stand-ups, weekly syncs, bi-weekly deep dives, monthly reviews, quarterly planning sessions, and the dreaded “quick touch-base” that is never quick.

The problem: If your commercial/sales/ops team spends all day in meetings explaining what they’re doing, when are they actually doing it? Every hour spent building custom reports for yet another status update is an hour not spent optimizing rates or analyzing competitor positioning or making that group sale. As I have said in detail here, meetings don’t generate revenue. They cost a lot!

3. Miss the Forest for the Trees

They don’t see the big picture. They spend site visits checking for dust on baseboards or critiquing the breakfast buffet presentation. Meanwhile, food and energy costs have spiked 15% over last year!

They’ll spot a crooked picture frame from 50 feet away, but somehow miss that the PMS crashes twice daily and the night auditor has been running reports on a calculator since the last Winter Olympics.

Mediocre asset managers confuse activity with impact, visibility with value, and being present with being helpful. They return from site visits with a list of cosmetic fixes, while the property continues to hemorrhage cash due to core issues that need urgent attention.

4. Use Data as a Weapon Instead of a Tool

Mediocre asset managers wield data like a weapon, but not for good…they just need to be right at all costs.

Every variance report becomes an inquisition, and every monthly review feels like a deposition. This doesn’t inspire excellence; it inspires self-preservation or what the youth call “quiet quitting.” Hotel teams stop taking smart risks and start building defensive documentation trails. Energy shifts from “how do we win?” to “how do I prove this wasn’t my fault?” The best people leave first. The rest quietly disengage, doing the minimum to avoid being the next target. Data should illuminate the path forward, not persecute the people walking on it.

5. Dodge Decisions

Mediocre AMs are constitutionally incapable of making hard decisions. They can spot a problem from a mile away, analyze it across seventeen pivot tables, and discuss it in nine consecutive meetings — but actually do something about it? That’s where their courage evaporates.

Underperforming employees are put on a performance improvement plan for months. Everyone knows it’s theater at this point, but the hard decision keeps getting delayed. The management contract is bleeding money and destroying morale, but “let’s give it another quarter.” The director of sales hasn’t closed a meaningful piece of business in six months, but “everybody likes him, he deserves another chance.” You get the picture.

Meanwhile, these problems compound. Good employees watch bad ones get coddled and update their LinkedIn profiles accordingly. When the inevitable disaster finally strikes, these AMs blame the property team with breathtaking hypocrisy. The “Why didn’t you tell me it was this bad?” email arrives like clockwork, conveniently ignoring the ten messages flagging that exact issue. But nobody made the hard call.

6. Destroy Hotel Morale and Profitability

The average cost to replace a hotel GM or department head at a 4-star property is roughly 150% of their annual salary when you factor in recruiting, training, lost productivity, and local market knowledge walking out the door. If an asset manager is driving turnover every 6 to 12 months in key roles, they’re not managing the asset…they are incinerating ownership’s capital.

Fear-based cultures don’t innovate. As noted above, team members who don’t feel supported stop taking smart risks and eventually start leaving. The hotel industry is shockingly small and well connected. Word travels fast about AMs who burn people to make themselves look good. Bad asset management doesn’t just hurt current performance, but also limits future potential. Once a property becomes known as a revolving door run by a toxic asset manager, top talent won’t touch it. 

Conclusion

Working with great asset managers has been transformational for me, both personally and professionally. When the right asset manager takes over a hotel, there’s a palpable shift in energy and momentum. They don’t sell fairy tales or rely on wishful thinking. They build strategies rooted in reality and execute them through empowered teams they genuinely trust.

If you’re an owner, demand better! Your capital investment deserves an asset manager who treats NOI like a religion, not a suggestion. If you’re an asset manager, aspire to be the person hotel teams are excited to see. If you’re a team member or vendor, take note of which kind of AM you’re working with before taking on a new project. It’s one of the best predictors of the asset’s potential for success…and your potential job satisfaction.

The General Manager Drives a Hotel’s Commercial Success

Almost every hotel today has access to or can easily get access to sophisticated pricing algorithms, innovative marketing campaigns, and revenue management tools. The barrier to entry is lower than it has ever been, and there are smart people available for hire to help you utilize these tools. So why are we seeing so many hotels struggle to maintain sustainable commercial success?

The answer lies in hotel operations. Specifically, I want to single out General Managers. It’s time to acknowledge that the right GM plays a crucial role in making sure your hotel revenue goals are achieved. In fact, you can’t really  succeed today without a good one.

Operational excellence is now the holy grail of hotel commercial optimization. Finding and retaining a great hotel General Manager is more crucial today than every before. They are the bridge between commercial ambition and operational execution. Yes, they are the ones who can make all your dreams of commercial success come true. But only if you involve them in your decision-making and empower them to help with implementation.

GM = Hotel Profit Symphony Conductor

Commercial optimization encompasses the entire guest journey. Revenue generation is not an isolated function that some nerds will make happen for you using Microsoft Excel. It has to be backed by a great product, which is the guest experience. Every touchpoint influences both immediate revenue and long-term profitability. 

This article is for any hotel owners or asset managers who are struggling today and wondering why their commercial optimization efforts are not delivering the stellar growth they were seeing in years past. The first question to ask yourself is…who is leading your hotel team? 

Your GM is the conductor of your hotel profit orchestra. No matter how good the individual artists are, a conductor brings them all together into a perfect symphony. Short-term commercial success is a flash in the pan. For profits to be sustainable, there needs to be a balance among guest satisfaction, operational efficiency, and overall financial performance.

After decades in commercial optimization, I have learned this important lesson:

The right GM can make even a mediocre commercial strategy deliver stellar results.
The wrong GM can turn a brilliant commercial strategy into a revenue nightmare.

I am very fortunate to have worked with great GM’s who have made my commercial optimization work incredibly successful.

The Revenue Management Reality Check

I am old enough to remember when Revenue Management was something new and shiny, that only a few elites had access to. It is now more sophisticated and accessible than ever. Hotels today have amazing access to incredible tools capable of processing vast amounts of market data, competitor intelligence, historical performance metrics, etc. Oh, and let’s not forget that everyone’s software is powered by a magical AI unicorn, churning out rate recommendations and insights with rainbows, sparkles and sunshine! But, your magical RM system, with the best RM team behind it, is only going to be as effective as your hotel operations team’s ability to deliver on the value proposition you have sold to your guests. 

Let’s look at a typical scenario where the RM system/team has identified an opportunity to increase rates during a high-demand period. Here is how it typically unfolds:

  1. Revenue Management System calculates the optimal price point based on market conditions and competitive positioning.
  2. Recommendations are approved and implemented.
  3. Hotel expects solid revenue performance.

Unfortunately, the outcome is not based on revenue management magic, but on operational implications. Here are some specific issues that can quickly derail the price increase:

  • Housekeeping department is understaffed and cannot maintain room quality standards.
  • Front desk lacks the training to handle higher guest expectations.
  • Food and beverage operations cannot accommodate higher service levels.

Revenue opportunity + Operational Issues = Reputational Liability

This is the trap a lot of hotels fell into post pandemic. For a while, no matter what hotels did, traveler demand and appetites seemed to be unlimited. But those days are now behind us. Current and future demand forecasts are not looking so hot right now. There is no room for operational error in today’s marketplace. Let’s look at some examples.

Case Study: March 2025 Compression Event

The Revenue Strategy:
A 185-room urban hotel’s revenue management team identified increased demand during a citywide event in March 2025. The system recommended increasing rates from $189 to $279 per night—a 48% premium justified by competitive analysis and historical patterns. The revenue team executed the strategy, and occupancy remained strong at 94%.

The Problem:
The operations team wasn’t properly briefed about readiness requirements.

The Fallout:

  1. Housekeeping (already at capacity) couldn’t handle increased turnover.
  2. Room cleaning times jumped from 28 to 42 minutes, creating a cascade of late check-ins.
  3. By 3pm on compression day, over 40 guests waited in the lobby for unavailable rooms.
  4. The front desk, unprepared for the volume of upset, premium-paying guests, struggled to manage expectations, handle bags, etc.
  5. Within 48 hours, 14 scathing negative reviews appeared, many from repeat business travelers vowing never to return.
  6. The $84 RevPAR increase quickly eroded. There was a 15% decline in repeat bookings over the following quarter, plus 20% higher customer acquisition costs to replace lost guests.

As you can see, a hotel operations disconnect triggers a vicious cycle of declining satisfaction, reduced pricing power, and diminished revenue performance. Only hotels with empowered GMs can count on operational support for the elevated expectations that come with premium pricing. Owners and asset managers who fail to involve their GMs in pricing strategy create the conditions for the really painful meetings that destroy team morale and productivity.

The Marketing Mirage

Marketing’s role in driving hotel revenue has expanded dramatically with the proliferation of digital channels and sophisticated targeting capabilities. As with revenue management, the access to marketing tools and talent is pretty democratic today. Why are so many hotel marketing campaigns falling flat?

Failure is usually a result of guest experiences in the real world not matching the hype that was created online. Marketing effectiveness ultimately depends on the property’s ability to deliver on its promises. Every marketing message creates expectations in the minds of potential guests. When the operational reality fails to match these expectations, marketing becomes counterproductive.

A beautiful website showcasing luxurious amenities means nothing if those amenities are poorly maintained. Social media campaigns highlighting exceptional service fall flat when staff members are inadequately trained or overwhelmed due to staffing issues. Let’s look at another real-world example.

Case Study: The Craft Cocktail & Artisanal Breakfast Catastrophe

The Campaign:
A boutique hotel invested in a comprehensive digital marketing campaign emphasizing its craft cocktail lounge and artisanal breakfast experience, featuring stunning photography, influencer partnerships, and targeted advertising.

The Problem:
The GM was not consulted on the hotel’s operational capabilities in F&B.

The Breakdown:

  1. The “cocktail lounge” was a small bar that only had room for one bartender.
  2. The bar staff knew just five specialty drinks and became overwhelmed during peak hours, creating 20-minute waits for simple drink orders.
  3. The “artisanal breakfast” relied on one pastry chef, who called in sick twice in the campaign’s first week, forcing the kitchen to serve pre-packaged pastries that looked nothing like the photograhpy in the campaign.
  4. Guests who booked for these specific amenities left scathing reviews.
  5. One viral TikTok showing a croissant with the caption “expectation vs reality” garnered 340,000 views, triggering immediate booking cancellations.
  6. Online ratings dropped from 4.7 to 3.8 stars within two weeks, requiring six months of operational improvements and expensive reputation management to recover.

The most sophisticated marketing campaigns cannot overcome operational inconsistencies. Effective marketing can actually exacerbate operational problems by creating false expectations and attracting guests who might otherwise choose properties better aligned with what they are looking for. This situation creates an insidious problem where marketing success leads to operational failure, ultimately damaging reputation and long-term commercial prospects.

Good General Managers serve as the crucial link between marketing promises and operational delivery. They understand their operational capabilities and limitations, and must be consulted to ensure that marketing messages align with realistic service levels. Even better, they can elevate operational standards to support ambitious marketing positioning that drives better commercial results.

Operational Excellence Is Your Commercial Foundation

Operational excellence in hospitality extends far beyond basic service delivery. It encompasses the systematic optimization of processes, the consistent execution of standards, and the continuous improvement of guest experience touchpoints. When achieved, operational excellence becomes a powerful commercial differentiator enabling hotels to command premium pricing, generate positive word-of-mouth marketing, and build the kind of guest loyalty that drives long-term profitability.

The hotel GM orchestrates all the components of operational excellence, laying the foundation for your hotel’s commercial success. Here is a great example of a GM driving revenues for an airport hotel.

Success Story: Airport Hotel Transformation

The Strategy:
A full-service airport hotel’s GM implemented a comprehensive operational excellence program focusing on three areas: housekeeping quality, food service consistency, and front desk efficiency.

Actions Taken:

  • Housekeeping: Introduced a 30-point inspection checklist and improved supervisor ratio from 1:22 to 1:15, ensuring consistent room presentation
  • Food Service: Standardized recipes, implemented prep schedules, and cross-trained staff to handle volume fluctuations
  • Front Desk: Created a training program and implemented a “green light” system during peak check-ins, incentivizing upgrades and empowering staff to offer compensation when issues arose

The Investment:

  • Six months for implementation
  • $180,000 for training, additional labor, and process refinement

The Results:

  • Online review score increased from 3.9 to 4.5 stars, placing the hotel in the top 15% of its competitive set.
  • Improved reputation enabled a $22 ADR increase, generating an additional $1.4 million in annual revenue.
  • Direct booking conversion rates jumped from 2.8% to 4.1% as potential guests gained confidence from reviews.
  • Corporate negotiated rates improved 8% during renewals as satisfaction scores exceeded contractual thresholds.
  • Repeat guest percentage increased from 24% to 37%, reducing customer acquisition costs by approximately $120,000 annually.

The operational excellence investment paid for itself within six weeks!

Operational excellence directly enables commercial flexibility. Properties with strong operational foundations can quickly capitalize on revenue opportunities—whether adjusting service levels to support premium pricing, or rapidly scaling to accommodate increased demand. This flexibility proves particularly valuable in dynamic market conditions where rapid adaptation will provide a significant competitive advantage.

The GM’s Indispensable Role

Great GMs align diverse teams to meet common objectives, while maintaining focus on both short-term performance and long-term sustainability. I have seen the greats in action as they set clear performance expectations, create accountability systems, and foster a culture of commercial awareness throughout the hotel organization. They develop team members who understand the connection between daily responsibilities and commercial outcomes.

A great GM once shared that she wanted her key departments to understand and join the revenue mission. For example:

  • Housekeeping staff should understand how room presentation affects pricing power, and how their work drives guest satisfaction and revenue.
  • Front Desk should appreciate the revenue impact of upselling and fixing problems before they escalate. As the first point of contact, their enthusiasm sets the tone for the entire hotel experience.
  • Food service teams should recognize how much their performance influences guest satisfaction and repeat business.

Artificial intelligence, machine learning, and automation promise to revolutionize everything from pricing strategies to guest service delivery. However, even the most sophisticated technology implementations will require human expertise to achieve optimal results. General managers play a crucial role in this technology-human synthesis by ensuring technological tools enhance rather than replace human judgment. Good GMs already understand automated systems’ limitations and can intervene when circumstances require flexibility beyond programmed parameters.

Conclusion

The hotel industry stands at a crossroads. Technology has democratized access to sophisticated revenue management and marketing tools. Operational excellence has once again become the top competitive differentiator—and gives the general manager the power to achieve the ultimate competitive advantage.

The uncomfortable truth is this: You can hire the best revenue managers, deploy cutting-edge technology, and craft brilliant marketing campaigns. But without an empowered GM driving operational excellence, you’re building a commercial strategy on quicksand. Hotels today don’t fail because they lack access to technology or market data. They fail because operational execution can’t support their commercial ambition.  

The Five Stages of Rate Parity Acceptance

Rate parity is an evergreen topic. I wrote an article on rate parity for hotels in 2023, and all the way back in 2015.  It’s an issue that seems to stir up a lot of concern at the asset management and property levels. Even as I write this, there are hotel industry professionals Googling rates and taking screenshots in the Google Hotel ads section to bring to their next revenue management meeting. Seasoned revenue managers are mostly ignoring these emails loaded with screenshots, as we have already addressed rate parity to the highest degree possible. Plus it’s hard to explain to our bosses that their belief that “we control our rates and distribution” is not quite true.

We want to think that nobody online ever lies, cheats or misrepresents just to get a click. We want to have complete control over our own online presence. So I empathize with those of you who feel angry or frustrated. But the truth is that, at some point, all of us have to go through the five stages of dealing with hotel rate parity acceptance.

As a commercial services provider, I get emails from asset managers, owners and hotel teams who are all in different stages of their rate parity journeys.  I feel their pain, but they have to go through these steps in order to come out on the other side. Think of me as a spiritual sherpa trying to help you seek parity enlightenment.

Stage 1: Denial ⇒ “Rate Parity Is the Only Way Forward!”

This is where a lot of newbies find themselves. They cannot believe that the OTAs, and resellers that pull inventory from OTAs, are displaying a rate lower than the hotel’s. Some of them become obsessed with the concept that rates need to be in 100% parity; if not, then someone is definitely asleep at the wheel.

They start to spend time hunched over their laptop, frantically taking screenshots of Google Hotel Finder rates as if they are documenting a UFO sighting or locating the rate parity Bigfoot. They are living in an ideal world where loading identical rates across all channels should mean that nobody can possibly undercut them unless someone on their team has made a mistake.

Meanwhile, the hotel distribution world is busy evolving around them. OTAs have merged and multiplied; more channels are pulling inventory from your hotel than you think. You can choose to stay in denial and continue to harass your revenue teams… but they see you as a modern age Don Quixote tilting at windmills for rate parity honor.

Stage 2: Anger ⇒ “Those Evil OTA Empires Must Be Stopped!”I

Now comes the war phase. People at this stage have their Che Guevarra hats on and are no longer mild-mannered hospitality professionals. Instead, they are now “Direct Revenue Revolutionaries.”

This is also known as the It’s Always Sunny in Philadelphia Pepe Silvia phase. They have red strings connecting screenshots from Google on the wall like they’re hunting international criminals while unraveling OTA pricing conspiracy theories. I have said this before: it’s easy to be a revolutionary with other people’s money. This is why I like to work directly with owners whenever possible, as they have the proverbial skin in the game. 

People stuck in this stage are convinced that their 80-room independent property can somehow out-market global platforms that handle millions of bookings daily. It’s like David vs. Goliath, except David forgot to bring a sling and Goliath has billions in marketing budget and distribution technology. 

Some of us are angry enough to use the nuclear option. “Let’s pull out from Priceline or [insert any other OTA name here].” The reality is that someone like Priceline can easily pull in inventory from Booking.com like nothing ever happened. Meanwhile, you take an empty victory lap for your “brave” actions.

When you are getting ready to teach your distribution partners a lesson, remember that their actual job is to sell more of your hotel rooms.  If you still choose war, I have nothing but thoughts, prayers and a classic song by Edwin Starr for you to listen to on repeat.

Stage 3: Bargaining ⇒ “If I Try Harder, I Can Get It.”

After the anger stage, a certain desperation sets in. You tell yourself if you do everything right, monitor channels, match promos, and offer a gimmicky direct discount, perhaps you can finally achieve the parity unicorn. 

You begin frantically running your private promos, mobile discounts, and adding value propositions with the energy of a caffeinated squirrel. This is when you also discover that your current technology can’t actually support half the things you want to do. So you start shopping for new vendors, convinced that the perfect new booking engine will be your salvation. It’s like thinking that buying a better pan will automatically make you a master chef — technically helpful, but missing the main point entirely.

Unfortunately, effort is not enough to beat the odds. Maybe you can count cards in blackjack, but you cannot negotiate with a slot machine.

Stage 4: Depression ⇒ “The (OTA) World Is a Vampire.”

Next we officially enter what I like to think of as the goth stage of rate parity. Reality hits like a brick to the face. This is when you realize that independent hotels without OTA exposure are about as visible online as a black labrador in a coal mine.

The anger and bargaining stage decisions have led you to scale back on OTA participation. Now you are staring at your dreaded STR reports, where your competition is doing circles around your hotel like they are Formula 1 drivers. Meanwhile, you are stuck in a pit stop of your own making. The revenue decline isn’t sudden — it’s more like revenue diabetes at this point, with market share slowly draining.

There is a level of sadness in realizing the mathematical truth: there really is no free lunch. The rate parity pain you tried to avoid by abandoning OTAs has been replaced by the much sharper pain of empty rooms and tumbling revenues. I have to say this is the saddest stage. The right amount of coffee and courage can help propel you out of this stage and into the next one. 

If you know someone who is stuck here, they need a good hug. Just please ask before giving it to them.

Stage 5: Acceptance ⇒ “Make Hospitality, Not War.”

This is the stage where my closest and wisest hotel industry folks live. But to get here, you first have to experience the stages above. It is painful, but the enlightenment in the end is worth it. This is where you finally accept the following simple truths.

  • Your guests are not stupid. Stop panicking. Yes, they saw that Mr. & Mrs. Smith’s hotel was showing 40% off with $100 F&B credit, and then they saw “Super.com” showing $100 lower rates, and then they saw another random reseller on Google Hotel Finder undercutting your rates.… But they know that most of these rates are not real once they go a few clicks deep into making a booking. Most travelers know that nothing beats booking direct when it comes to looking for help, changing reservations, dealing with last minute upheavals, getting upgrades, requesting airport pickups, etc, etc. They would rather speak to your hotel team instead of a call center on any given Sunday.
  • Freedom of choice is real. Hotel guests aren’t mindless, price-driven sheep. They want value and they’re perfectly capable of choosing where to book based on their own preferences and needs. Yelling “book direct” at them does not really help. People who like to book direct will always do it. Expedia, Amex and Booking loyalists will do what they need to do to get that (points) bag. Keep calm and carry on.
  • Choose common sense over angst. There are some things your hotel revenue manager can do for you; other things are completely outside of their control. OTAs and their AI can create ghost room categories, undercut commissions, and update ads at a lightening pace. That is what they are designed to do. You and your revenue manager can use common sense to match promos wherever possible. Don’t worry about the impossible. The conversation needs to refocus onto how to give your guests the good ol’ razzle dazzle when they do book direct with you and keep them coming back!
  • It’s the hospitality business, not a distribution war game. Somewhere along the way, hospitality has taken a back seat. Time to change that! Revenue strategy isn’t a zero-sum death match with your distribution partners. It’s more like a complicated dance where everyone needs to know their steps. Your revenue manager is conducting an orchestra. Yes, some individual member of the team will miss a note sometimes, but the show must go on. A good revenue team will keep you moving forward despite any missteps.

I really hope you get to this stage soon and I will C U When U Get There (RIP Coolio).

Conclusion

The hotel rate parity acceptance process is a natural progression. The sooner we reach the acceptance stage, the sooner we can stop playing games and start making money. The goal is to return focus to the hospitality side of things so that people will want to come stay at our properties.

“Life is pain. Anyone who says differently is selling something.” (Dread Pirate Roberts, The Princess Diaries). In our case, they’re probably selling a website, booking engine, or revenue management software that promises to solve all your distribution and revenue problems while you sleep. It is important to have the right technology, but that will never replace the value of having talented (and accepting) hotel management and revenue teams that support each other in reaching the common goal of providing excellent hospitality at optimal rates. 

Now, if you’ll excuse me, I need to go see whether Booking.com, Priceline and Expedia are running any new promos undercutting the hotels I am currently working with…and then go for a long walk.

Hotel Website Design & Usability Non-Negotiables 

Your hotel website is a crucial pillar of your revenue and profitability. Whether you stay independent or have a hotel brand powering your distribution, a dedicated website is always the best investment you can make in securing a revenue future for your asset.

As I’ve written about websites many times in the past, I think it’s time for a refresh. This post was inspired by the fictional Chef Carmy Berzatto on The Bear and the list of “non-negotiables” he made for his new restaurant. Below is my list of non-negotiables for hotel website design and usability.

Every Second Counts

This one is right out of the high-stress kitchen series…and 100% relevant to your hotel website. Taking more than 3-4 seconds to ‘serve’ your website is simply not an option anymore. Slow load times are impacting your guests’ website experience and your revenue.

This rule 100% also applies to your booking engine. If you want bookings, make load speed your number one priority.  That means choosing technology that’s lean and fast, and avoiding booking engine software that’s bloated with extra coding.

You Must Be Searchable

Search engines cannot be an afterthought. The very first step a traveler takes when they decide to travel is to start looking for accommodations using an array of location and interest-based keyword searches. In contrast, when planning a new website, owners often spend endless hours on photos and colors and forget about searchability. Adopting a search first mindset will ensure that you are set for success from day one.

Search considerations should drive the development of your navigation, sitemap, content and landing pages. UX (User Experience) elements that focus on demonstrating E-A-T (Expertise, Authoritativeness, Trustworthiness) are key to making sure your website eats your competition’s lunch.  (Or just “eats” if you’re living with a teenager.) Creating a high-quality, user-friendly, easy-to-navigate website is more important than the video drone shot that is now available on 99.99% of hotel websites worldwide. 

Convert Traffic Into Revenue & Leads

The main goal of your website is to share information about your hotel to help drive revenue. However, if revenue is the only conversion you are tracking, then you are in for a heartbreak. In addition to revenue tracking at the bottom of the funnel, you need to be tracking lead capture: RFPs submitted, newsletter signups, etc. Website UX, content, landing pages, and calls to action should all be focused on starting a conversation, collecting leads, and ultimately driving revenue.

An integrated CRM is crucial for keeping track of leads. Don’t spend all your time tracking bottom of the funnel campaigns and sending repetitive “book now and save” emails to your guests (like this). You can’t overestimate the value of generating brand exposure and harvesting top of the funnel (not ready to book yet) traffic and interest in your hotel. Think ahead. Cultivate the guests you want to see in your hotel in the future. If you are a truly independent hotel, then this is the only real way to stay relevant.

Measure Successes & Failures

You must track your website performance using Google Analytics (GA4). Of course, you could use an expensive analytics program instead if you wish…as long as you measure everything you can – not just ROI. The Google ecosystem delivers good value for free IF you set it up correctly. Setting up and then making sure that the right GTM (Google Tag Manager) containers are firing is a sure shot way to keep track of both progress and decline. In addition to connecting with the booking engine to track activity and revenue, you also need to identify and configure secondary targets to measure the performance of your landing pages, videos and website forms. 

Democratize all information sharing by using Looker Studio reports. Stop wasting time mailing reports to people who will almost never open email attachments and read them. Even better, waste less time in meetings. You know how I feel about meetings, right? 

Refresh Content & Photos

I have been a WordPress fan forever. Digital asset ownership and independence aside, hotels should be able to change their content and photos anytime they want, and preferably without the need for any expertise.  An easy CMS (Content Management System) is key for success in keeping your content and images fresh. Your website is not a shrine to your branding greatness that you refresh every 4-5 years. The content needs to update often to stay relevant over the seasons. 

Note: Relevancy is not adding a website Pop-Up announcing the latest seasonal discount deal. Don’t just do that. Instead, add content and information that humans need (and search engines and AI models are looking for) in order to help plan travel to your hotel location.

Mobile First 

Need a strong “Heard!” response to this one. Responsive design is more relevant than ever, but the experience cannot just drop off once a guest leaves the website. We are entering the peak of “if I can’t book on the phone, I’m not coming” generation. Looking beyond browsers is key. It all about individual devices and your mobile phone “bookability” factor. I recently transitioned eight hotels away from a “perfectly good desktop but sloppy on mobile” booking engine just last year! You should do it too, as soon as you can! In my specific case, the conversion and revenue improvements in the first three months post upgrade were 100% worth the pain. A successful transition to a mobile-friendly booking engine and CRS (central reservations system) will pay dividends quickly, and for a long time afterwards.

Keep It Legal, Please!

Laws can be a bother sometimes, but there is almost always a thought behind them. Always strive to keep things legal on your hotel website. Accessibility and Tracking are the two areas where you should never let your hotel website trip you into legal trouble. All websites should comply with WCAG Level AA accessibility standards. They help make sure you are being kind and welcoming to all types of hotel guests on your website. It’s the right thing to do, and also happens to be the legal thing to do. 

You should also refrain from annoying potential guests whenever possible Most people hate getting tracked after visiting your website. It’s not you: it’s the advertisers chasing them with ads across the internet. Make sure your website has a cookie consent widget that is properly connected to your Content Management System and Google Tag Manager account. It is your legal responsibility to show privacy policy notices, so this is, legally speaking, as ‘non-negotiable’ as it gets. 

Conclusion

Your website is your hotel’s digital storefront, the place where you share information, showcase your product, and sell rooms. Something that is working for you 24/7/365 deserves continual updating and improvement. If you are not hitting all the points above, it’s always a good time to get to work! Websites don’t have to be perfect, but they always have to be welcoming, easy to find, and easy to use. Make decisions and implement changes quickly and efficiently, as often as you can. Remember:  Every Second Counts.

Why Are Hotel Property Management Companies Struggling?

Hotel Property Management Groups (PMGs) have been a pillar of the hospitality business for decades. They bring expertise, operational efficiencies, and the greatest gift of all — taking on the day-to-day operational challenges of running a hotel.

However, if you have been reading the headlines, you can sense that trouble is brewing in the PMG world. Some of the largest hotel management firms are struggling to stay afloat and cannot seem to hold on to the assets in their portfolio. There are internal and external conflicts, and even lawsuits being filed over things like intellectual property. These issues highlight how fragile the hotel-PMG relationship has become.

Disappointed owners and investment groups are firing and replacing PMGs at a pace we have never seen before. What’s going on here? Let’s start by looking where trouble usually starts: poor decisions coming from the top. The consequences of decisions made by PMG execs trickle all the way down to the frontline staff of a hotel and end up reflecting in the guest experience. 

Specifically, PMGs are failing to meet expectations on two fronts:

Guests: Service and Experience
Owners: Revenue and Profits

A perfect storm has been brewing for a while, making it harder for PMGs to be effective and profitable. The key components of this storm are:

  • The Modern Traveler
  • Economic Pressures
  • Commercial Optimization Challenges


The Modern Traveler

Post pandemic, we saw a big shift in how people travel and how they use their discretionary income. The loyalty point chasers are still out there, but most people are looking for a seamless digital experience, a local connection and a memorable stay. Hotels that integrate local/neighborhood activities and culture into their marketing and operations are doing very well. The traditional PMG model of standardizing services and rolling them out across a diverse hotel portfolio is not working as well. This disconnect is hitting PMGs the hardest. The practice of “boutique washing” a hotel is not connecting with guests. Industry legend Bashar Wali’s article about “Faux Tique” hotels is a must-read.  

Today’s guests want:

  1. Personalization: They want to be recognized as individuals. Personalization requires sophisticated guest data management and tailored service delivery, which (to further complicate things) varies by location and guest type. This kind of approach is very resource-intensive and hard to implement on a large scale, especially if you are managing hotels in different locations.
  2. Digital Experiences: Guests expect seamless integration of technology, from the beginning of their booking process to the end of their hotel stay. They want to use smart devices and phones to book online, manage their reservations, check-in/out, manage their smart room controls, etc. They feel the need…the need for speed. However, unlike Tom Cruise in Top Gun, their need for speed is all about their WiFi connection.
  3. Unique Experiences: The rise of lifestyle/boutique hotels and alternative accommodations has shifted consumer preferences toward unique, localized experiences. PMGs will have to innovate and diversify their offerings to compete, making their standardized service models obsolete.

Economic Pressures

Economic factors also threaten the profitability of PMGs and their managed hotel assets. Here are the top three external elements affecting PMGs.

  1. Global Economic Fluctuations: The hospitality industry is highly sensitive to economic cycles, and there have been some big ones: the global pandemic shutdown, global reopening, revenge travel, election year, armed conflicts, and now the current softness. This has all happened in just five years! PMGs are facing these challenges across a collection of hotels in multiple geo locations, and sometime even in international markets.
  2. Rising Operational Costs: The costs of labor, utilities, and supplies are rapidly increasing. In addition, the need to invest in new technologies and upgrade facilities to meet modern standards is further adding to the financial burden.
  3. Increasing Competition: The proliferation of alternative accommodation options, such as vacation rentals, soft brands and home-sharing platforms, has intensified competition in the hospitality industry. Professionally self-managed hotels are providing value and experiences at a much lower cost and stealing market share from mass-managed assets. There was a time when a PMG offered cost advantages. Today, with all the new affordable technology, an independent hotel can run circles around a hotel management company in terms of cost by using tools that don’t have participation hurdles. Service levels may be lower, but a P&L with reduced cost is always a thing of beauty.

Commercial Optimization Challenges

This is the area where I have personally seen the biggest change in the past few years. Revenue Management and Digital Marketing have been democratized. They no longer belong to the elite and well-connected. Any independent hotel in the world can now gain access to information, tools and talent that replace what a PMG can offer. It’s amazing how quickly a hotel asset can take off once dedicated revenue management and digital marketing support are provided.

There are still some big challenges to consider. These are the top items that will damage your hotel’s commercial strategy when you scale but forget to innovate:

  1. The Silo Problem: The silos of Revenue, Sales, and Marketing not only exist, but are in fact getting taller in some hotel management companies. I started talking about breaking the hotel silos at industry events back in 2016. That was over seven years ago! It is a little depressing to see so many PMGs still running their commercial teams in silos. Big brands were never expected to change, but it’s surprising to see that some of the the younger PMGs are still not embracing integrated commercial operations.
  2. The RMS Problem: Brand hotels don’t have Revenue Management Software (RMS) options; they are trapped in long-term contracts with preferred vendors. However, an independent hotel sticking with outdated revenue systems is like a tourist going to Spain and exclusively dining at McDonald’s. There are some fantastic companies out there selling revenue and marketing software that was not designed in the early 90s. It’s worth taking the time to find out which system is the best match for your property and location.
  3. The Digital Problem: Same as above: you cannot optimize your digital experience using an outdated tech stack. If your booking engine has not upgraded its mobile booking experience in 8+ years, you should not be using it. Likewise, your online marketing budgets, spending strategy and goals need to be customized for your location and not limited to an MSA you have signed with an agency to save costs. The ROI-obsessed PMG models are tanking hotels located in super-competitive markets. Owners are cheating themselves out of market share because nobody has taken the time to evaluate their digital marketing needs. Add to this a one size fits all vendor to cut costs, and the result is nothing short of a disaster. It is so much easier to complain about the OTAs… who are actually striving to offer guests a seamless experience across screens and locations.
  4. The Meeting Problem: If you have not read this, then please do! Find out how meetings are ruining the hotel business. I’ve seen hotels managed by PMGs that are dying in the market but still having a daily revenue meeting…it happens more than you think!

In the end, Revenue, Sales, and Marketing all end up doing their thing using their old timey corporate tools. They have endless meetings with zero positive output. When the hotel does not meet its revenue targets, they have another meeting to assign blame. In the end, nothing really changes, and just like that another year starts again.

Owners and investors are starting to realize there are better options out there. Mediocrity can thrive as long as nobody notices. Once you see it, you have to do something about it.

One Metric to Rule Them All

Owners are waking up to a new P&L reality. Even when revenue is up, so is the cost of doing business. You can analyze STR reports all day and night, but at the end of the day, you don’t deposit ADRs and Rev Par’s into the bank. It is all about the Net Operating Income, and that metric is really under pressure these days… you know, the kind of pressure Queen and Bowie would write a song about.

Net Operating Income (NOI) shows the profitability of income-generating real estate investments like hotels:
NOI = Total Revenue – Necessary Operating Expenses

NOI is a before-income-tax figure on a property’s income and cash flow statement that excludes principal and interest payments on loans, capital expenditures, depreciation, and amortization. Hotels are a real estate business. Yes, hospitality involves a lot of passion and creativity; but at the end of the day, you have to generate NOI. This is where owners are catching a lot of PMGs asleep at the wheel. So if I had to pick one thing that is sinking the property management party boat, it has to be failure to generate a suitable NOI for the asset.

Conclusion

Hotel management companies are navigating a complex and rapidly evolving landscape. While the challenges are significant, they also present opportunities for innovation, differentiation, and growth. By embracing technology, creating personalized and unique experiences for guests, and customizing commercial strategy for individual hotels, PMGs can overcome these challenges and begin to thrive again. The future of hotel management will be defined by those companies that can effectively balance these demands. They must continuously evolve to meet the needs of the modern traveler, while providing the necessary income to keep assets profitable.

A Hotel Guide for Avoiding OTA Panic and Rate Parity Games

OTAs are a fact of life in our industry. But there are so many negative feelings about them, constantly being stoked by hotel media, that it becomes difficult for hotels to form calm, cohesive OTA and rate-setting strategies.

OTA-bashing articles surface every few months, no matter what cycle the travel business is in. These articles usually involve screenshots of OTA rates being lower than the hotel’s direct rates, leading to complete disgust and a ton of hate reading. Other times, these feelings of fear and loathing towards OTAs are triggered at conferences by speakers going for some cheap applause.

I would like to ask you to put all that aside, and keep an open mind. Please remember that, as a revenue professional, your goal in life is not to teach the OTAs a lesson. It is to make more revenue! You should try to avoid Maslow’s hammer approach when thinking about your relationship with your distribution partners:

If the only tool you have is a hammer, it is tempting to treat everything as if it were a nail.

Your revenue strategy cannot be focused on proving that the OTAs are an evil empire, and that only your rate parity games will topple them. The goal of pricing is to make sure that you convert all of your hotel investments into revenue.

Now, if you’re ready, please read on to learn about some OTA and pricing strategies that have delivered millions in revenue for owners and operators that have embraced it.

The Rate Parity Games

Rate parity surfaces a couple of times a year. Usually, it is:

  • Declared dead
  • Something that is killing your direct revenue

I am posting a third option for you to consider: Don’t play games.

People are posting articles filled with “screenshots of proof,” as if they have finally located the Chupacabra or Bigfoot. A lower rate published on an OTA versus a hotel website is highlighted as a “gotcha moment” and a complete failure of your parity-based pricing strategy. The “game over” vibes are pretty doom and gloom (even for me). They make me think of Bill Paxton.

Rate parity should not be misrepresented as loading the same rates on all channels… and then immediately going to bed, zero follow up. Dynamic pricing requires a little bit more work than that. Once your rates are loaded, you have to keep an eye on the OTA channels, like Booking and Expedia, and monitor what they are doing with the rate you gave them.

Here are reasons/examples of how and why they might be showing lower rates:

  • Are they running opaque promos?
  • Are they running mobile promos?
  • Are they running merchant model promos?

If the answer is yes, then please match these offers on your website. Instead of canceling your entire participation with them, do your best to implement competitive rates on your direct channels.

In other words, once the rates are uploaded to the OTA, don’t assume your revenue manager is then handcuffed and cannot make any edits! When you notice parity issues, do something about it right away. Some examples:

  • Run your own private promos.
  • Run your own mobile promos.
  • Offer direct value that OTAs cannot match.

If your current booking engine technology vendor does not permit you to take these actions, then find one who does. The answer is not abandoning parity; it is having the smarts to monitor and enforce it on all channels when possible.

Ah, The Good Ol’ Billboard Effect

A big argument against rate parity in pricing is the idea that there is no billboard effect for an independent hotel that is listed on a global OTA. This study was first published back in 2009 by Cornell University, with another follow up written in 2017.

I am not here to debate the billboard effect. If you feel strongly that this does not have any relevance, then please withdraw from the OTA channels and watch your competition overtake you.

It is very easy for direct revenue fanatics to throw the billboard effect under the bus. Do you know why? Most of them are not personally invested in the asset. And if there is one thing that I have learned from working in revenue optimization for 20+ years, it is this:

It is very easy to be a revolutionary with other people’s money.

I will elaborate more on these revolutionaries below. For now, let’s look at some traffic and revenue stats for the top OTAs in the business:

[table id=10 /]

If you want to opt out of this exposure and revenue stream because a consultant, marketing agency or software provider thinks you can 100% make up for it using their direct revenue software? Then all I can say is… good for you! Abandon all parity and put your lowest rate on your website. Then give it some time and watch your competitors do circles around you. The effect of this strategy is not sudden death but more like diabetes… a slow decline, which means that by the time you discover it, it’s too late.

There Is No Free Lunch!

It’s not just a saying! An actual mathematical theorem highlights a fact that we have all known for a while: There are no shortcuts to success.

Dealing with OTAs may seem painful when you just think of the commissions. However, do we expect them to give us traffic and revenue for free? Commission, while painful, is the cost of doing business. The Princess Bride probably said it best:

OTAs don’t owe you anything. You can try to undercut them and limit your participation to prove a point. But in the end, that decision is going to cost you revenue and loss of market share as an independent hotel. No amount of creative marketing or software can protect you from this outcome.

Guest Ownership Quandary

We can debate all we want, but hotels don’t “own” the guest. Neither do the OTAs or any other form of travel agent. Your hotel guest today is a little smarter than we like to give them credit for.

Since the pandemic, most hotels have seen their direct revenue share grow. In spite of the “death of rate parity,” the overall market share of every hotel that maintains true rate parity has gone up. How is this happening if the guests are mindless, price-driven sheep? This is happening for a simple reason: they are looking for value and not just a few dollars off the rate.

If you want guests to book direct, you have to showcase value in addition to a good rate. Flexible cancellation policies over the past two years drove a huge volume of bookings for direct channels. Hotels answering their phones and actually helping guests also enabled higher rates, plus more direct bookings and increased market share. Have you ever tried to locate someone at an OTA to quickly resolve your booking issues? There is no substitute for direct contact with someone who you are going to be staying with.

Give your guests a little more credit. Instead of “owning” them, offer them value that only you can give them. And please accept that people who are hooked on OTAs will always book there, no matter what. It could be loyalty, points, or just habit. Don’t wage a war to try to convert these guests on your website. It’s the same as trying to get a Marriott loyalist to stay at your independent hotel. Even if you have a superior product, he will pick the breakfast buffet with watered down scrambled eggs every time to maintain his status with the brand.

Playing Revolutionary With Other People’s Money

Direct revenue is a crucial component of your distribution strategy. You have to work to build and grow it whenever possible. Vendors often present direct revenue as a magical, pain-free solution to all your revenue problems. However, there is a limit to your reach and your budget when it comes to marketing your hotel to a global audience. This is particularly relevant to independent hotels that do not have a brand contributing to their revenue base.

I read something ridiculous last year along the lines of “You should withdraw your hotel from all merchant models and promotions.” Someone selling software and services was calling for hotels to withdraw from all the OTAs and then double down on offering mobile discounts on their direct channels.

I have noticed that most of the direct revenue revolutionaries are playing with other people’s money. If they were paying the mortgage, payroll, insurance and fees on a hotel asset from their own bank account, I guarantee you they would be participating in everything 24-7.

You see, I too fancy myself as a hotel revolutionary. However, I am not going to sabotage the asset owners’ finances to prove a point. That is highly unethical and risky behavior with negative consequences.

Your revenue strategy is not a zero-sum game that you play with your distribution partners. Celebrating lack of visibility on OTAs and assuming everything will magically come in “direct” is deeply flawed logic. An independent hotel today cannot afford this level of carelessness when it comes to their distribution strategy.

Conclusion

I wanted to share my thoughts on how your hotel can stop hating and start focusing on improving your revenue and distribution mix. My strategies have delivered millions in top line revenue for assets I have worked with over the years. So please view this article as more than a think piece. This is real cold hard cash we are talking about! And it might even feel good to let go of some of those negative feelings and start viewing the OTAs as partners. Focus on negotiating the best contracts with them, and make them work to your advantage. And take responsibility for maintaining parity by offering rates or added value that make your direct offers more appealing to guests.

Meetings: The Black Hole of Hotel Revenue and Productivity

Meetings are the black hole of productivity. I’m not saying this just to be dramatic. There is plenty of evidence coming your way. Keep reading!

I have been attending corporate meetings since my early days in the industry, so we’re talking about two decades now. However, things have recently gotten worse. During the pandemic, the number of meetings we all had to attend sharply increased. A Microsoft Study highlighted a 250% increase in meetings compared with what employees had to deal with before the pandemic.

Those who know me know exactly how I feel about meetings. When I get stuck on a long call, I catch myself internally chanting “This Meeting Could Have Been an Email” over and over like a monk. Meetings waste valuable time that I could be using to do actual work, like reviewing analytics, rates, content and strategy. You know, the stuff I enjoy and am getting paid to do.

Meetings are endemic to corporate environments. However, a cure is possible. It involves having leadership say no to unnecessary meetings. I think the “Anti-Meeting” movement can gain ground if more owners and senior leaders understand the huge negative impact that meetings can have on their bottom line.

There is also the fact that meetings are making you stupid, which should not come as a surprise to anyone who has been in the corporate workforce. But for now, let’s focus on the dollars.

A Very Expensive Hobby

What if I told you that meetings are really, really expensive? I wish it was mandatory for all meeting hours to be accounted for in the company P&L as a “cost of business” line item. I think if these numbers were released, there would be a quick change in how we manage our collective time.

How can you calculate the real cost of a meeting? Well, there is this simple formula:

Total Cost of Meeting  =  # of People Attending  x  Their Hourly Rate  x  Meeting Duration*

*Trigger warning: The numbers you will arrive at are staggering.

Let’s run a scenario for a small group of company managers. If five people in your organization with annual salaries of $100,000 per person spend 15 hours per week in meetings (three hours a day)… those meetings are costing you $3,846 per week. Keep up this pace, and these meetings end up costing your organization $200,000 per year! Here is a 2 min 35s montage of Owen Wilson saying “wow” to help you cope with this shocking reality.

What about larger/branded hotels? Larger organizations take this bad habit to a whole new level. Just peek into any big brand’s “FDD” (Franchise Disclosure Agreement). Every major hotel brand uses it to define services they will offer to their franchisees. You can access these hotel FDDs on the internets. Guess what item is included as a “service” that hotels must pay the brand for for? Answer: “Revenue Meetings.”

Your average revenue department managing several branded hotels likely spends a whopping 56+ “person-hours” per week on meetings alone! That’s approximately 2,912 hours per year of hours that ultimately get billed to hotel franchise owners as part of their fees. Even at a base rate of $50/hour, hotels are seeing $145,600 worth of time wasted on meetings. This time should have been spent on making your hotel more money.

Senior management is very likely spending up to 80% of their time on meetings. This is corporate sanctioned madness.

The reality is that meetings are a cost item which is entirely ours in the making. Meeting lovers are causing significant financial damage to your organization.

A (Long) Wrinkle in Time

Meetings do not only kill productivity. They also add another blow to everyone’s mental focus and health. If you have successfully stopped everyone from doing their day-to-day work, then you’d better wrap up quickly!

How long should a meeting be? My magic number: 30 Minutes Max. Going over 30 minutes indicates that either one or more of the following has happened:

  • Meeting agenda was not planned.
  • Pre-meeting prep was skipped.
  • Longer meeting time is being mistaken for “collaboration.”
  • Longer meeting time is being mistaken for “brainstorming.”
  • Someone really likes the sound of their voice and won’t stop talking.

Rarely, a slightly longer meeting is needed. However, the default one-hour meeting invite, that some folks just love to send out for every meeting, is not helping. First step toward change: email back requesting a shorter meeting. Offer to review items in advance… unless they were going to reveal the location of the Holy Grail to you… which we all know has to be done face to face with no advance notice or reading materials to prep.

Second step: encourage colleagues to change their default meeting invite setting to 30 minutes. It only takes a few seconds to save hundreds of future meeting hours.

A New Approach to Brainstorming

Just like meditation, clear thinking requires alone time. New ideas come from within and they can happen anywhere. Ideas cannot be scheduled and magically appear in a meeting room setting under florescent lights (or in front of a fake Zoom background).

Next time the senior managers get the “brainstorming” itch, try this instead:

  1. Share the topic/problem with the team via email in advance.
  2. Ask everyone on the team to email back their individual/independent ideas.
  3. Post all ideas in one place.
  4. Have attendees vote on the best ones.
  5.  Schedule the meeting.

Ok, you now have 30 mins to discuss and finalize best ideas. Good luck, we are all counting on you!

Stop Trying to Be “Synchronous” in a Remote Work Economy

Remote work is here to stay. Expecting everyone on your team to stop doing everything else to be “present together” at a designated time will keep getting harder. Meetings throw a massive wrench in the way we work asynchronously in real life. Teams work on different schedules across various time zones, reviewing files, data and statistics, and performing daily tasks that need to be done. Bringing everyone’s productivity to a grinding halt is a colossal waste of time and money. If you are calling an all hands on deck meeting, you’d better have something really important to share. Something that has to be shared synchronously…you know…like the exact location of the Holy Grail.

Don’t Confuse Meetings With Work

The theme from Severance starts playing in my head when I think of the massive number of hours I have spent in meetings (that could have been an email).  Meetings are corporate approved black holes of productivity that hide in plain sight, because they get absorbed as “work” hours.

True collaboration and brainstorming will never be confined to meetings. Employees or contractors whose calendars are filled with meetings are not really working for you; they are working for their calendar and running on a hamster wheel to nowhere. Real work happens when you stop talking and focus on the task at hand. Emails, Slack, G-chat, texts, and short 1:1 calls can resolve most of the issues in your day-to-day work life. We can collaborate without interrupting everyone’s workday to herd them into a meeting room.

Steven Rogelberg (Professor of Organizational Science, Management and Psychology at UNC Charlotte) conducted research on meetings and their impact on work. Here is a snapshot of the results:

“We surveyed 182 senior managers in a range of industries:

  • 65% said meetings keep them from completing their own work.
  • 71% said meetings are unproductive and inefficient.
  • 64% said meetings come at the expense of deep thinking.
  • 62% said meetings miss opportunities to bring the team closer together.”

These are striking numbers, yet they should not come a surprise to anyone working in our industry. We are simply meeting ourselves to death.

A Few Good Meetings

If you can handle the truth…then yes, it is actually possible to have good meetings. This is my secret formula for how to make good meetings happen at your organization:

  • Limit meeting time to 30 mins, no exceptions.
  • No sitting whenever possible.
  • No news, weather or sports-related talk.
  • No tea, coffee (not even for the closers), or food. Only water.
  • No open laptops. Notebooks only.
  • Phones face down, on silent.
  • Email in advance: agenda, reports, videos, slides, etc.
  • Observe meeting free days of the week (eg, Monday, Wednesday, Friday).
  • Slide reading is always strictly prohibited. Summaries and discussions only.
  • Have attendees anonymously rate every meeting on a scale of 1-10, and share results with the team.

Conclusion

I am not saying all meetings must die. However, most meetings can and should be avoided or shortened. Be the leader in your company who starts declining useless meetings. I’m not saying you can decline all invites from your boss; this trend must start from the top. (I’m talking to you, leaders and managers.)

Instead of reading cliche management books, advance your management career by boosting your team’s productivity and your company’s revenue. Useless meetings are crushing your team’s morale, making them dumber and less productive. Give the people what they want, and get better results from them in return. You can be a hero!

Despite your best efforts, if you still find yourself in a terrible meeting, do not lose heart. Find a meditative chant that works for you, or borrow mine: “This meeting could have been an email.”