Hotel Giants Double Down on AI to Drive Direct Bookings and RevPAR Growth

IHG and Hyatt told investors artificial intelligence is being embedded across pricing, merchandising and service systems to lift conversion, grow loyalty spend and improve owner returns—part of a broader industry push to translate AI investment into measurable revenue gains.

By HNR News Staff Reporter

IHG Hotels & Resorts and Hyatt are positioning artificial intelligence as a revenue engine rather than a technology experiment, outlining on recent earnings calls how AI is being integrated into pricing systems, digital merchandising and guest communications to increase conversion, boost RevPAR and enhance owner profitability.

Their focus mirrors a wider shift among major global hotel companies. Executives at Hilton, Marriott, Accor, Wyndham, and Choice have also highlighted AI initiatives in investor updates, with most efforts focused on revenue optimization, direct-channel growth, and cost-to-serve efficiencies that support margins.

Revenue management moves to the center

Dynamic pricing remains the primary use case. Hotel groups are expanding the use of machine-learning models to forecast demand by room type, segment, and market conditions, enabling faster rate adjustments and more granular inventory controls.

Choice Hotels has long promoted its AI-enabled ChoiceMAX platform to help franchisees optimize ADR and RevPAR. Larger global operators say they are deepening similar capabilities, linking revenue management more closely to distribution and loyalty data to protect rate integrity and respond more quickly to demand shifts.

The objective: strengthen RevPAR index performance while improving mix and minimizing reliance on discounted channels.

Personalization aimed at higher conversion and spend

Brands are also using predictive models and generative AI to tailor website and app content, loyalty offers and ancillary merchandising. By presenting the most relevant room type, package, or add-on in real time, companies aim to increase booking conversion and total revenue per guest.

Hyatt and IHG have cited upgrades to direct-booking and loyalty platforms designed to improve search results, personalize offers and encourage incremental spend. The revenue impact is measured not only in occupancy, but in higher ancillary capture and repeat bookings among loyalty members.

Service automation tied to cost and retention

AI tools are increasingly deployed in call centers and guest messaging systems to reduce handle times, automate routine responses and support agents with real-time recommendations. Companies say these initiatives lower operating costs while improving response speed—factors that can influence booking decisions and brand loyalty.

Some operators are also piloting AI systems that summarize guest feedback, generate localized marketing content and automate property-level reporting, freeing staff to focus on revenue-producing activities.

Owner economics and margin focus

For franchisors, AI adoption must translate into measurable returns at the property level. Tools supporting labor scheduling, maintenance prioritization and procurement decisions are being positioned as margin protectors, particularly in an environment of wage pressure and uneven demand.

Executives emphasize that demonstrating tangible RevPAR lift and cost savings is essential to drive adoption across franchised portfolios.

Competitive and financial drivers

The acceleration comes as hotel brands seek to defend direct bookings against online travel agencies that already deploy advanced AI-driven pricing and merchandising. Cloud migrations and unified data platforms over the past decade have also made it easier to deploy AI models at scale.

At the same time, investors are pressing for productivity gains and disciplined capital allocation. AI projects are increasingly evaluated on their ability to produce sustained improvements in conversion, ADR growth, ancillary revenue and cost-to-serve metrics—not on pilot-stage innovation.

Risks and measurement

Industry leaders acknowledge challenges, including data consistency across property systems, privacy regulations and the need for careful rollout in franchise networks. Ultimately, companies will be judged on whether AI delivers durable financial outcomes rather than incremental operational tweaks.

Outlook

With IHG, Hyatt and peers placing AI near the center of commercial strategy, the next phase is likely to focus on scaling proven tools across portfolios and hardwiring performance measurement into revenue systems. The competitive stakes are high, but brands that can translate AI into consistent gains in booking conversion, pricing power and owner returns stand to capture a disproportionate share of industry growth.