Cendyn and Amadeus’ Hospitality Group and Business Performance Index reached its highest rating in four quarters during Q3 2024, driven by increased room nights and average daily rates (ADRs). The index reported an overall health metric of 107.9% year-over-year, underscoring strong group performance, according to the companies’ report released Wednesday. Key Highlights: Top Markets: Among the top 25 markets, Houston, New Orleans, and Chicago led the way, with overall health metrics of 120%, 118%, and 114.8% year-over-year growth, respectively. All markets surpassed the 100% mark, except San Francisco. Performance Drivers: The quarter benefited from a 1% increase in room nights and a 5% rise in ADR, marking the eighth consecutive quarter of growth. Event Metrics: Hotels hosted an average of 136 attendees per event, with a slightly reduced average event space usage of 3,766 square feet compared to 4,025 square feet in Q2. Industry Insights:  The meetings and events sector proved pivotal, with hotels of all sizes experiencing growth. National associations were the top drivers of events, followed by weddings, education, healthcare, and nonprofits. Phoenix saw the largest growth in meetings volume in October, as reported by Cendyn, which recently acquired Knowland. Hotel Performance Boost: Group travel significantly boosted RevPAR for major hotel operators such as Marriott International, Hyatt Hotels, and IHG Hotels & Resorts. Las Vegas saw notable group contributions to hotel performance, as highlighted by MGM Resorts, Caesars Entertainment, and Wynn Resorts in their Q3 earnings calls. Marriott CEO Anthony Capuno described the group business performance as "really encouraging" during the company’s earnings call. San Francisco's Struggles: Despite the overall positive trends, San Francisco continues to underperform. Downtown hotels face declining property values amid reduced demand and heightened crime, setting it apart from other top markets. With robust group business metrics and continued opportunities in the meetings and events industry, the hospitality sector looks poised for further growth in the coming quarters.

The hotel industry is poised for significant growth this year, driven in part by the popularity of extended-stay accommodations. Projected to reach over $426 billion in global revenue by the end of 2024, the industry is expected to maintain an annual growth rate of 3.7%, with a market value nearing $512 billion by 2029. Extended-stay hotels cater to travelers who need well-equipped lodging for extended periods, often weeks or even months. With remote work on the rise since the pandemic, these accommodations are in high demand for their flexibility. Hilton, a long-time leader in hospitality, has expanded its portfolio with LivSmart Studios — a new brand of studio apartment-style suites designed for longer stays, featuring designated areas for cooking, working, and relaxation. “Through thorough research, we identified a gap in our portfolio and the broader hospitality market in the rapidly growing $300 billion workforce travel segment,” shared Isaac Lake, LivSmart Studios' brand leader. “This unique offering provides apartment-style accommodations for travelers staying 20 nights or more and presents an appealing investment opportunity for developers looking to diversify with Hilton.” Hilton has been in the extended-stay market for over 30 years, but interest surged during the pandemic as healthcare workers filled rooms for extended periods. Today, remote workers, families, and vacationers are increasingly drawn to these accommodations. Launched in 2023, LivSmart Studios offers an affordable midscale option with practical amenities, appealing to property owners seeking a cost-effective, easy-to-operate hotel. Lake emphasized that guests today value a home-like experience, from preparing meals to enjoying productive and spacious layouts. LivSmart Studios has been designed with these needs in mind, offering a reimagined extended-stay experience. “LivSmart Studios incorporates a warm, inviting design with adaptable layouts that balance comfort and productivity,” Lake explained. The concept also features a nontraditional lobby experience with retail, fitness, and other conveniences for a seamless, extended stay.  This model has shown strong growth as workforce mobility increases across industries, and it is expected to attract younger professionals starting out in careers that require flexibility. “Our concept is ideal for long-term business travelers, those on work assignments, and insurance and construction professionals needing convenient, extended accommodations,” Lake said. The first LivSmart Studios, set to open in 2025 in Kokomo, Indiana, will feature 137 units with kitchens, storage, fitness amenities, and a laundry facility. Early feedback from hotel owners and potential guests has been enthusiastic, which has contributed to Hilton’s inclusion in Fast Company’s 2024 list of Most Innovative Companies. Lake expects continued success in the extended-stay sector, citing the importance of partnering with hotel owners and developers from the outset. “We’re in active discussions on more than 350 development projects, with many developers interested in multiple LivSmart Studios locations,” he said. “The brand’s adaptable footprint makes it a fit for urban, suburban, and secondary markets alike.” Hilton is looking forward to future expansions and sees LivSmart Studios becoming a mainstay in multiple markets worldwide.

Hotel investment is picking up, guest demand for immersive experiences is growing, and extended stay accommodations continue to be a major focus. However, the industry still faces significant challenges, particularly in the areas of labor and technology. At the recent Lodging Conference in Phoenix, hospitality leaders, including CEOs, brand executives, and industry experts, expressed optimism about the hotel sector's future. The conference featured discussions that highlighted both opportunities and hurdles in the evolving landscape of hospitality. Rising Hotel Investment Activity Kevin Davis, Americas CEO for JLL Hotels & Hospitality Group, shared that hotel deal activity is expected to accelerate in the final months of 2024, thanks to anticipated interest rate cuts. As we head into 2025, Davis predicts this momentum will continue, likening the investment climate to a "boulder rolling down a hill" — gradually picking up speed as hotel transactions increase. Other industry leaders echoed this sentiment. Greg Juceam, CEO of Extended Stay America, pointed out that clarity around the upcoming U.S. elections, significant refinancing opportunities, and new property improvement plans will fuel the investment boom. Meanwhile, Dave Pollin, co-founder of The Buccini/Pollin Group, noted that the maturity of billions in hotel loans will drive transactions over the next 18 months, setting the stage for robust deal activity. According to JLL research, approximately $5.8 billion in U.S. hotel loans will mature by the end of 2024, further spurring transactions. Highgate CEO Arash Azarbarzin emphasized that 2025 will be an exciting year for investment, given the low supply of new hotel construction and favorable interest rates. Growing Demand for Experiential Stays Another major trend highlighted during the conference was the increased demand for experiential stays. Today’s travelers are seeking more than just a place to rest their heads — they want unique, memorable experiences that immerse them in the local culture or environment. As a result, hotels are increasingly focusing on creating tailored, innovative experiences to meet guest expectations. Extended Stay's Continued Popularity Extended stay properties remain a bright spot in the hospitality sector. Industry experts at the conference referred to this segment as the "darling" of the industry, given its consistent performance and investor interest. With flexible accommodation options that appeal to both leisure and business travelers, extended stay properties are well-positioned to capture market share in the years to come. Challenges with Labor and Technology While optimism abounded, conference participants also acknowledged persistent challenges, particularly in the areas of labor and technology. The hospitality industry continues to face staffing shortages, making it difficult for hotels to meet service expectations. Additionally, there is growing pressure to adopt new technologies that can enhance operational efficiency, improve guest experiences, and address evolving demands, such as contactless services and personalized digital interactions. Industry leaders recognize that addressing these challenges is crucial for long-term success. As they navigate the complex landscape of labor shortages and tech innovation, many are focused on finding creative solutions to stay competitive. Looking Ahead Overall, the 2024 Lodging Conference reinforced the sense that the hospitality industry is on the brink of a new era. With rising hotel transactions, increased demand for experiential travel, and the continued strength of the extended stay market, there is plenty of optimism for the future. However, tackling labor and technology challenges will remain key priorities for industry leaders as they strive to sustain growth and capitalize on the opportunities ahead.

Outdoor-centric travel is on the rise, and Field & Stream Lodge Co. is at the forefront of this growing trend. A collaboration between Starwood Capital Group, AJ Capital Partners, and Field & Stream, the brand is set to bring unique outdoor experiences to travelers across the U.S. with its first location now open in Bozeman, Montana. The launch of Field & Stream Lodge Co. marks the beginning of a new chapter in outdoor hospitality. With an ambitious target of opening 35 properties across the United States, the brand is dedicated to creating locations ""rich in natural experiences"" that encourage guests to explore and embrace the outdoors. The Bozeman property, already accepting reservations for winter 2025, offers an enticing combination of modern comforts with the charm of traditional hunting and fishing lodges. An Unforgettable Montana Experience Located just one mile from downtown Bozeman and only two hours from Yellowstone National Park, the Field & Stream Lodge Bozeman is perfectly positioned between breathtaking rivers and mountains. Whether you’re into biking, hiking, fly fishing, or skiing, this year-round destination offers a wide range of activities to cater to every outdoor enthusiast. Barry Sternlicht, chairman and CEO of Starwood Capital, said it best: “The property will deliver a unique blend of modern, affordable lodging that perfectly complements the environment surrounding it.” This blend of classic outdoor charm and contemporary amenities is sure to create an exceptional guest experience. A Strong Partnership for a Strong Brand The Field & Stream Lodge Co. brand is a collaborative effort, bringing together the expertise of AJ Capital Partners, the force behind the Graduate Hotels brand, and Starwood Capital Group. Launched in 2022, the partnership aims to uphold Field & Stream's 153-year legacy of outdoor expertise and experience while offering guests high-quality design and affordable lodging. With 35 properties planned across the United States, totaling over 4,200 rooms, Field & Stream Lodge Co. is building an outdoor lifestyle hospitality brand that resonates with a growing number of travelers seeking nature, adventure, and affordability. Riding the Wave of Outdoor-Centric Hospitality In recent months, other major hotel brands have also moved towards outdoor-focused accommodations to meet the rising demand for adventure travel. Hilton has partnered with AutoCamp, while Hyatt Hotels Corp. has teamed up with Under Canvas, demonstrating a broader industry trend of expanding into nature-focused experiences. The Bozeman lodge is the first step for Field & Stream Lodge Co. in its mission to redefine outdoor lodging in America. Whether you’re a seasoned adventurer or simply someone looking to escape to the great outdoors, Field & Stream Lodge Co. promises an experience that connects you to nature like never before. Field & Stream’s Legacy Meets Modern Innovation The brand also attracts attention from other corners of the outdoor lifestyle industry. Earlier this year, country music stars Eric Church and Morgan Wallen acquired Field & Stream magazine, re-launching it as a media and apparel company. While the exact involvement of Church and Wallen with the lodges is unclear, the renewed interest in the Field & Stream brand highlights its relevance and appeal in today's culture of outdoor exploration. Looking Ahead Field & Stream Lodge Co. offers the perfect opportunity to experience the outdoors without sacrificing comfort. With Bozeman now open, adventure awaits. Whether it’s a weekend getaway or an extended stay to explore Yellowstone, Field & Stream Lodge Co. aims to make every guest's outdoor adventure memorable. If you’re ready to embrace the great outdoors with a mix of timeless tradition and modern convenience, make your reservation at Field & Stream Lodge Bozeman today."

Since New York City initiated its crackdown on short-term rentals like Airbnb six months ago, finding affordable lodging has become more challenging and expensive. The number of available Airbnb listings has plummeted by over 15,000, according to an analysis by AirDNA. As a result, travelers are either wary of sharing quarters with hosts or uncertain whether their rental is even legal. Hotels, meanwhile, have taken advantage of reduced competition, raising their prices. Rebecca Norman, who plans to visit New York from the U.K. with her family in October, found that an average hotel room with a pullout couch would cost $4,400 for a five-night stay. "I look at all these hotels, and what I want isn't at the price I want," she said. Despite the shrinking supply, legal Airbnb hosts have seen their bookings fall, forcing them to drop rates. Several other cities facing housing shortages are watching New York's example, as Christian Klossner, the executive director of the city's Office of Special Enforcement, explained that the main goal is to uphold laws that protect both housing and residents. With New York's restrictions, neighboring areas like Jersey City and Hoboken in New Jersey have become attractive alternatives for travelers seeking Airbnb accommodations. Since September, New York City has required short-term rental operators to obtain licenses, which led thousands of hosts to pull their listings from Airbnb. The number of Airbnb units available for less than 30 days dropped from about 21,500 in August to just 3,280 in February, according to AirDNA. To offer a legal Airbnb listing in New York, hosts can’t rent out an entire apartment or home, and they must be present during the stay. This requirement has significantly reduced the availability of full-unit rentals. In December 2023, city hotels charged an average of $393 per night, an increase from $355 in the previous year. Comparatively, Airbnb and Vrbo listings for entire homes averaged $404 a night, while private rooms averaged $157, according to AirDNA data. Hotel prices have risen due to a variety of factors, including reduced competition from Airbnb, the use of 16,500 hotel rooms for housing migrant arrivals, and development regulations, according to Vijay Dandapani, CEO of the Hotel Association of New York City. Yotel New York Times Square saw a boost in business through Airbnb, with a 36% increase in occupancy compared to the same period the year before. Despite the city’s efforts, unregistered short-term listings have proliferated on third-party sites such as Craigslist and Facebook. The boom in Airbnbs began when the city faced a significant shortage of affordable rentals, leading many to list properties on Airbnb instead. Jonathan Miller, author of NYC rental reports from Douglas Elliman, noted that even with more units becoming traditional rentals, it wasn't enough to curb rent increases. For travelers like Chris Conte, a New Jersey resident, finding affordable lodging in the city has become more challenging. Conte, who often booked Airbnb stays near concert venues, ended up splitting a $345-a-night Holiday Inn Express room in Queens after finding limited options on Airbnb. “If it’s for the happiness of the city, then so be it, we have to adjust,” he said. Legal Airbnb hosts have had to change their strategies. Kat Casey, who owns a two-family home in Astoria, Queens, with her husband, intended to use the income from their rental unit to support maintenance costs. Under the new regulations, guests stay in a private room in a shared unit rather than a private apartment. As a result, Casey’s future bookings are down 50% from last year. “There’s a lot more cancellations, a lot more questions, and a lot more anxiety with guests than previously,” she said, noting that the regulations don't support families like hers. Similarly, Aminah West, who previously managed multiple rental units in Brooklyn, lost significant income as owners pulled their listings post-enforcement. Though she still manages a single licensed rental, West has had to drop her nightly rate from $120 to $90 to attract guests. Despite the challenges, she remains motivated to continue hosting, viewing it as a way to connect people from around the world. “Beyond the economic case of it, I get to build a bridge to, and through, community for people around the world,” she said. New York City's stringent regulations have reshaped the short-term rental market, creating hurdles for both visitors and hosts. With limited lodging options and soaring hotel rates, travelers and residents alike must navigate a new landscape that prioritizes housing stability over short-term convenience.

For many hotel owners and investors, the wait may finally be over. The U.S. Federal Reserve is expected to initiate a series of gradual interest rate cuts starting this week. While the markets have factored in this possibility, the exact number and size of cuts remain to be seen. Since March 2022, the Fed has raised interest rates 11 times, with the goal of cooling the job market and bringing inflation closer to its 2% target. These increases took the federal funds rate from 0.25%-0.5% to its current range of 5.25%-5.5%. Oxford Economics predicts the Fed will cut interest rates by 25 basis points this week and continue with similar reductions every other meeting through 2025. Their forecast suggests two cuts by the end of 2024, lowering the policy rate to 4.88%, with further cuts expected to reach 100 basis points by the end of 2025. Zach Demuth, global head of hotel research at JLL, notes that forward curves have already priced in at least 50 basis points of cuts for the rest of the year. Even though these cuts have been anticipated, their arrival is still welcome news. The Fed’s signaling of rate reductions has already stimulated market activity, as more buyers are entering the market and capital is moving off the sidelines. Demuth anticipates that lower interest rates will significantly boost transaction volume in the coming months. Raymond Martz, co-president and CFO of Pebblebrook Hotel Trust, believes that these rate cuts will serve as a catalyst for increased transaction activity in 2025. Additionally, spreads on commercial mortgage-backed securities (CMBS) debt have been narrowing, making borrowing costs more affordable. This will provide a more favorable environment for underwriting, encouraging buyers to proceed with more confidence. While the first 25-basis-point cut may not make a substantial difference, Martz points out that the Fed’s intention to return to a more neutral rate is a positive indicator for the market. The projected 220 basis points in cuts by the end of 2025 will likely boost confidence and further fuel transaction activity. Despite the promising outlook, Isaac Collazo, vice president of analytics at STR, warns that there will be a lag in hotel development following the initial rate cuts. Of the 761,000 hotel rooms in the U.S. pipeline, 43% are in the planning phase, and many of these projects will need time to secure financing. Rate cuts will help free up capital, but the full impact on development may take years. Collazo also highlights the challenges faced by developers, such as high material costs and labor shortages, which may delay project progress. Additionally, while lower interest rates will help reduce borrowing costs, some lenders are still requiring significant equity in deals, further complicating the development process. In the broader economic landscape, the anticipated rate cuts may encourage companies to invest more, potentially spurring business travel and driving demand for hotels. However, Collazo notes that the positive effects of lower interest rates will take time to reach consumers, especially those dealing with high levels of credit card debt. While higher-income households may benefit from an improving housing market, lower- and middle-income earners are likely to struggle with their debt burdens for some time. Collazo emphasizes that it will take time for these consumers to reduce their debt and return to their previous levels of spending. Overall, the expected interest rate cuts offer hope for the hotel and investment markets, but their full impact may not be felt for years. Developers, investors, and consumers alike will need to be patient as the economy adjusts to the new rate environment.

 Inflation has boosted hotel rates, but occupancy has yet to fully recover. NASHVILLE, Tennessee – Over the past few years, midweek hotel demand has shown a steady increase, with transient demand recovering faster than group demand. Despite this trend, the group segment is in a stronger position to reach full recovery, as factors like office attendance and new hotel supply pose challenges to transient demand growth. Before the pandemic, Wednesdays were the peak day for U.S. hotel occupancy, driven primarily by corporate travelers. Between 2010 and 2019, Wednesday’s average combined occupancy rate of 66% was the highest for any weekday, reflecting consistent growth, particularly in the second half of the decade. The pandemic, however, caused a drastic decline. As offices shut down and business travel dwindled, Wednesday occupancy, which stood at 68.4% in 2019, plummeted to 43.9% in 2020. During the "Wednesdays are the New Wednesdays: Exploring Midweek Demand" session at the Hotel Data Conference, CoStar’s National Director of Hospitality Analytics, Jan Freitag, highlighted the sharp drop in occupancy. "We went from selling 7 out of 10 rooms to just 4 out of 10," Freitag said. "But that 40% occupancy was actually a false positive because the second quarter was even worse." Average daily rates (ADR) followed a similar trajectory, dropping by $32 year-over-year from 2019 to 2020. In 2019, 28.4 million transient hotel rooms were sold on Wednesdays, but that number fell to 12.7 million in 2020. Group bookings saw an even sharper decline, with 15.4 million group rooms sold on Wednesdays in 2019, falling to just 4.3 million in 2020. Current Trends for Wednesday Occupancy As of June 2024, Wednesday occupancy stands at 62.1%, slightly down from 62.5% the previous year. While still in recovery mode from the 68.4% occupancy seen in 2019, Freitag explained that the lag is expected given the current market dynamics. "Demand hasn’t fully returned, and while the industry wasn't operating, new hotels were being built," Freitag said. "It will take some time to not only recover 2019 demand but also absorb the additional supply." Since 2019, the supply of hotel rooms on Wednesdays has grown by 3%. Although supply has remained muted over the last eight quarters, this may benefit hotels aiming to boost occupancy rates. In contrast to occupancy, rates for Wednesdays recovered to 2019 levels by 2022 and are now 50% higher than in 2020. "On the rate side, it’s been a success story," Freitag said, attributing the faster recovery of rates to inflation. From 2016 to 2019, ADR grew by 6%, and from 2022 to 2023, it increased by the same percentage. The Outlook for Business Travel Midweek demand from Monday through Thursday remains below pre-pandemic levels, with transient demand down 3% and group demand down 8%. Despite this, Freitag remains optimistic about group demand recovery. "I’m confident we’ll continue to see solid growth, especially in the latter part of the year, with strong numbers expected in September and October," Freitag said. However, the outlook for transient demand is less certain. Even though transient demand is nearing 2019 levels, office attendance remains weak, with Kastle Systems’ Back to Work Barometer indicating that office occupancy is only at 50% of January 2020 levels. This reduced office presence has led to fewer business trips for meetings. "If people aren’t in the office, there's less reason to travel for meetings," Freitag said. "You’re not going to fly from Nashville to New York to meet with someone working remotely from their home in Hoboken. That meeting will happen on Teams or Zoom." In major markets like New York City, San Francisco, and Chicago, an increase in available class-A office space has correlated with lower upper-upscale hotel occupancy, highlighting the connection between business travel and hotel performance. This combination of reduced business travel and increased hotel supply makes it difficult for downtown hotels to regain pre-pandemic occupancy levels. "On the transient side, I still have questions about when we’ll fully recover," Freitag said. "But for group travel, it’s not a matter of if, but when."

NASHVILLE, Tennessee – Artificial intelligence (AI) has become a popular topic in the hotel industry, but there are still many questions about what it really is, how soon it will affect the industry, and how it can be used effectively. At the recent Hotel Data Conference, during a panel titled “AI in Hospitality: How Will It Affect You?”, Kurien Jacob from Highgate Technology Ventures explained that AI and machine learning are modern versions of older machines designed to do specific tasks. He encouraged the industry not to fear AI but to see it as a tool that can significantly boost productivity. Todd Brook from Unchained highlighted that much of the fear surrounding AI comes from not understanding how it works. He gave an example of using AI to analyze documents like Word files or Excel sheets, emphasizing that while using AI is simple, gathering the right data for it is more challenging. Even though AI is similar to past technologies, some people are still hesitant to embrace it fully. Arlene Ramirez from CoralTree Hospitality suggested that the industry should focus on how AI can improve productivity rather than worrying about it taking jobs. Lisa Targonski from Elder Research added that AI allows employees to develop new skills and get rid of repetitive tasks. She pointed out that other technologies in the past didn’t eliminate jobs but changed how people worked. However, Kurien Jacob noted that AI might reduce the number of people needed for certain tasks because AI will handle more routine work, allowing humans to focus on creative and strategic tasks. Todd Brook added that in the near future, the real concern might not be losing jobs to AI but being outpaced by colleagues who know how to use AI tools effectively. AI Concerns and Risks One major concern with AI is whether its outputs can be trusted. Arlene Ramirez said that users need to ask the right questions and understand their business to get reliable results from AI. Todd Brook suggested that detailed questions, ideally about 200 words long, produce better AI responses. He emphasized the importance of checking AI’s work to ensure accuracy, as AI is meant to assist but not replace human judgment. As more companies adopt AI, different departments may use it in various ways, which could lead to problems. Lisa Targonski recommended forming an AI council to create a consistent approach across the organization. Kurien Jacob compared AI to refining fuel: just as oil needs to be processed to make fuel, data must be cleaned and verified before being used by AI. If the data isn’t accurate, the AI won’t work well. On the productivity side, Jacob mentioned that AI can save time on daily tasks, allowing employees to focus more on creative and strategic work. Arlene Ramirez advised leaders to carefully choose AI tools that best fit their team’s needs, rather than trying to adopt every new technology.

Hotel companies are increasingly betting on artificial intelligence (AI) to enhance their room pricing strategies, a practice known as revenue management. This field, which relies heavily on forecasting, is primed for a significant overhaul through AI-driven innovation. Although these advancements won't occur overnight, the industry is optimistic about the potential efficiency gains as software developers address current concerns surrounding the security and reliability of generative AI. Experts anticipate that within a few years, these hurdles will be overcome, enabling hotels to refine their pricing strategies with greater precision. "While many AI applications seem to address problems that don't truly exist, revenue management is a perfect fit," says Jeff Edwards, a consultant and former IHG executive. Given the complexity and data-heavy nature of revenue management, AI has the potential to outperform human capabilities in real-time decision-making. Building Confidence in AI Recommendations One of the key challenges for AI in hotel pricing is establishing trust with decision-makers. Currently, revenue management systems often produce complex data outputs that require interpretation by human managers. This leads to skepticism, particularly when automated rate recommendations are made as booking dates approach. AI could bridge this gap by offering more transparent insights through interactive chat interfaces, allowing managers to ask questions and understand the rationale behind specific rate suggestions. This enhanced clarity could build greater confidence in AI-driven recommendations, as highlighted by Darren Koch, Chief Product Officer at Duetto. The Future of Pricing: Dynamic Room Rates and Social Media Insights Generative AI has the potential to transform how hotels price individual rooms by tapping into unstructured data sources, such as social media. For instance, a hotel room that frequently appears in traveler posts could be dynamically priced higher due to its perceived popularity. Ryan King of Shiji Americas points out that AI’s ability to process and analyze vast amounts of data could reveal new patterns in travel demand, leading to more nuanced pricing strategies. This shift from broad room rates to highly targeted pricing based on unique room attributes could become the new norm. Beyond Room Rates: Enhancing Ancillary Revenue with AI AI’s impact could extend beyond room pricing, improving the management of ancillary revenues like dining and additional services. By analyzing guest behavior and loyalty status, AI could help tailor rates and offers more precisely, driving overall revenue growth instead of just increasing room rates. Redefining Guest Acquisition and the Role of AI AI’s integration into revenue management might also reshape how hotels attract guests. As chat-based search using large-language models begins to replace traditional search engines, a new concept—Generative AI Optimization (GAIO)—could emerge as the next evolution of search engine optimization. While broad adoption of AI in revenue management may take time, early indicators are promising. Companies like Cloudbeds are already leveraging generative AI tools to boost productivity, and industry leaders predict that those who unify their data and embrace AI will gain a competitive advantage. Nevertheless, challenges persist, particularly in ensuring the accuracy and security of AI systems. As Brian Kirkland, CIO at Choice Hotels, notes, resolving these issues is crucial before AI can be fully integrated into commercial operations.  As AI continues to advance, its role in revenue management could be game-changing, driving a shift toward data-driven decision-making and reducing reliance on traditional methods. Hotel companies that successfully adopt and implement this technology stand to gain a significant edge over their competitors.