Artificial intelligence is changing how hotels function, extending beyond basic revenue tools to create more tailored guest experiences and better financial choices. The approach reflects methods used in retail for years, where technology driven by data maximizes every customer interaction. For hotels, this means turning each stay into an opportunity—not just for room bookings, but for dining, spa services, and other offerings that often go unnoticed.
Retail lessons for hotels
Joe Watkins, Head of AI and Data at Journey—a platform serving over 750 hotels, including Chewton Glen and Grantley Hall—drew parallels between hospitality and retail. After investing in attracting a customer, the focus shifts to maximizing that opportunity. Retailers have spent decades perfecting this method, using data to personalize shopping and reduce obstacles. Hotels, where rooms generate only 50-60% of revenue, cannot afford to overlook the rest.
Obstacles in the booking process hurt earnings. Watkins highlighted unnecessary steps like missing images, disconnected systems, or services not visible online as barriers to sales. Every extra click or manual step risks losing revenue. The fix involves treating hotel services like retail products: presenting them with clear descriptions, bundling them into a single purchase, and suggesting upgrades before checkout.
Data enables personalization, but raw information alone falls short. Effective use requires powerful analytics and technology accessible to staff who can act on insights. This means providing teams with instant access through mobile dashboards or AI tools that surface relevant details in real time.
Fragmented systems leave money on the table
The main challenge for hotels isn’t a lack of offerings—it’s disconnection. Guests might book a room online but never discover the spa or restaurant because those systems operate separately. Watkins noted that hotels lose revenue through these gaps. If an experience isn’t visible or easy to book, guests are less likely to purchase it.
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Most properties already have the tools to address this. The difficulty lies in connecting them. The opportunity now is to be as deliberate about using data and technology with the same commercial discipline as retailers adopted decades ago. A unified platform could solve this by allowing guests to find, book, and pay for experiences in one smooth process.
This approach isn’t just about selling more extras. It’s about understanding each guest’s preferences. A wellness-focused visitor should have a different experience than a business traveler. Connected technology makes this level of customization possible, but it demands that hotels move past isolated departments and view all services as part of a single strategy.
AI as a digital colleague, not a replacement
The next phase of AI in hospitality will go beyond answering questions to completing tasks. Watkins described AI agents that help guests plan entire stays, from reserving rooms to scheduling spa treatments, all through a single conversation. Behind the scenes, these agents could spot revenue opportunities, update content, and automate repetitive work, allowing staff to focus on guest service.
He emphasized that the biggest opportunity isn’t replacing people. It’s enabling hotel teams to spend less time on manual processes and more on delivering exceptional experiences. AI agents could also learn from guest interactions, refining responses over time and even generating ideas for new products or revenue streams.
AI isn’t a cure-all. It requires safeguards. Watkins stressed that human oversight remains essential for commercial decisions and guest interactions. The aim is enhancement, not replacement—using technology to handle routine tasks so staff can concentrate on what matters most.
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Personalization offers another area where AI can help. Hotels that recognize guest preferences—past purchases, dining habits, or spa visits—can adjust recommendations instantly. Watkins noted that when guests feel understood rather than targeted, properties gain a stronger chance to build loyalty and encourage direct bookings. This becomes increasingly important as competition for repeat visits grows.
Beyond room revenue
For years, hotels measured success using average daily rate and revenue per available room. These metrics provide only a partial view. The future lies in total revenue per available room, which includes all guest spending on dining, spa, retail, and activities.
Watkins pointed out that a hotel can only sell a room once each night, but it can increase the value of that stay by making more experiences visible and easy to purchase. Services like spas and restaurants are no longer secondary—they’re key commercial assets. Properties that treat them as such will be better positioned for long-term growth.
The transition won’t happen quickly. Watkins advised hotel leaders to focus on three priorities over the next year: establishing strong data foundations, reviewing the guest journey to eliminate friction, and deploying AI for practical, high-value applications. The hotels that perform best will be those that stop thinking in terms of occupancy and start considering the value of every guest.
Success measurement must evolve too. Instead of tracking only room revenue, hotels should monitor experience attachment rates, conversion, and repeat behavior. The goal isn’t just to fill rooms—it’s to create stays that guests want to repeat and experiences they’ll pay for again.
