Chains struggle with AI strategy, independents see fast ROI

INTERNATIONAL REPORT – Artificial intelligence (AI) is advancing in hospitality, making it easier for staff to offer guests the human touch while the technology takes over other operational processes. New research on both global hotel chains and independent properties reveals that AI adoption is expanding across the hospitality sector, but barriers remain, including strategy, skills and integration.

Two studies – H2c’s AI & Automation in Hospitality: Navigating Today’s Challenges, Shaping Tomorrow’s Gains and TakeUp’s AI Hospitality Revolution 2025 – off a view of how differently large hotel groups and independent operators approach AI.

Together, they capture perspectives from more 370 hoteliers worldwide, encompassing luxury chains, mid-market brands and small, independent hotels.

Chains see AI potential, strategy and trust lag

According to H2c’s global study, based on input from 171 hotel chains representing more than 11,000 properties, 78% of chains already use AI and 89% plan to expand applications in the next 12 to 24 months.

Chatbots dominate current usage (42%), while customer data management is the leading area of planned investment (50%).

Notably, hotels’ reliance on AI lags behind their stated trust in the technology. While hoteliers gave AI a trust score of 6.6 out of 10, actual reliance on AI averaged only 4.7—that reflects the lack of a formal strategy for AI adoption.

Only 7% of hotel chains report having a comprehensive, company-wide AI strategy. The barriers to AI adoption for hotel chains are substantial: 

• 62% cite a lack of expertise
• 51% say strategy is unclear
• 45% struggle with integration
• 39% cite high costs or budget constraints

Other hurdles to overcome include organizational resistance to change (31%), concerns over data security and privacy (30%), uncertainty on ROI and investment (27%) and data quality and accessibility issues (26%).

“AI adoption in hospitality is accelerating, but most hotel chains are still experimenting,” said Michaela Papenhoff, managing director of h2c. “Bridging the trust-reliance gap will require more investment in staff skills, better integration, clear ROI measurement and a focus on use cases that deliver tangible value.”

Independents move faster on AI and see benefits

If big brands are cautious, smaller operators are showing striking agility in AI adoption.

TakeUp’s poll of 200 independent property owners and managers found that 74.5% of properties using AI report positive results, while most (66%) have been using AI between six months and two years, they already report measurable returns.

• 16.7% report that automated guest communication has delivered the most value
• 13.8% have benefited most from AI in marketing campaign optimization
• 12.1% report gains from using AI in dynamic pricing optimization
• Many (19.7%) cited time savings and efficiency as their top reasons for AI adoption, with cost reduction (13.1%) and competitor advantage (10.12%) also being key motivators.
• Guest communication is the top adoption area (13.4%), followed by marketing and advertising (12.1%) and social media management (11.2%).

The revenue impacts of AI adoption are also notable. Among properties reporting gains, 25.5% saw revenue rise between 6 and 10%, while another 35% reported increases of between 11 and 20%.

“Independent property owners aren’t just dipping their toes into AI anymore, they’re diving in and using it to win,” said Bobby Marhamat, CEO of TakeUp. “The fact that 74% of owners say AI has met or exceeded expectations shuts down the outdated myth that small properties can’t succeed with AI.”

Nearly 70% of those surveyed view AI as essential to staying competitive, and 39% call it a significant competitive advantage.

Common threads

Despite differences in scale, both studies highlight the same motivations: reducing repetitive tasks, boosting efficiency and enhancing guest experiences.

For chains, business intelligence (78%), chatbots (77%) and digital marketing (72%) rank as the most valuable applications.

For independents, automated guest communications (16.7%), marketing campaign optimization (13.8%), dynamic pricing optimization (12.1%) and energy cost reduction (12.1%) are the top priorities.

In both cases, staff acceptance of AI is positive. TakeUp’s survey found 78% of staff are somewhat comfortable or very comfortable with AI tools. Meanwhile, two-thirds of h2c’s respondents said AI frees teams to focus on more strategic or guest-facing work.

“I believe people have very special skills—but they often don’t have the time or space to use them. With AI, we’re finally giving that time back,” a small chain executive cited in the H2c study said.

For both groups, the balance between automation and personal touches is still an essential element of hospitality. Half of chains (62% of large chains) and 74% of independents say maintaining a personal touch is critical.

“In hospitality, the human touch makes all the difference. Even if tasks change, humans will continue to add the most value,” said a chain executive in the H2c study.

Even so, traveler trends will drive the expansion of AI adoption. More than 60% of independents responding to the TakeUp study reported that guests appreciate or love AI-powered features.

AI from the hotel guest perspective

Travelers are increasingly at ease with AI. Phocuswright research found in its “Chat, Plan. Book: GenAI Goes Mainstream” study that more than half of U.S. travelers (51%) now use generative AI (not just for travel), up from 39% in 2024 and 22% in 2023.

Adoption in other markets is also growing. In the U.K., 41% of travelers surveyed said they used generative AI, up from 36% in 2024 and 14% in 2023. Travelers in France (39%) and Germany (38%) are also increasingly more comfortable with AI in day-to-day applications.

• 33% of U.S. travelers use generative AI tools (ChatGPT, Google Gemini and AI-powered search) to plan their trips and, while traveling, for in-destination support
• 22% of UK travelers rely on AI for their trips
• 22% of French travelers use AI for travel applications
• 15% of German travelers use AI tools for trips
• Among travelers who actively use GenAI, between 38% and 55% used it to plan at least one trip.

Perhaps unsurprisingly, younger generations are more likely to use GenAI to plan their travels. Around 60% of millennials and younger travelers in the U.S., U.K. and France use the technology—the share drops to 44% in Germany. By comparison, GenX and Baby Boomers generally lag behind in AI trip planning, with a median of 33% among all regions combined.

When it comes to finding their next hotel, 85% of U.S. travelers trust AI to search.

And trust in AI is growing; between a quarter and a third of travelers surveyed across the four markets said they would be interested in booking their travel through a GenAI engine, or letting an AI assistant book for them if the service were available.

AI-answer engine offering hotel bookings

There are many applications for AI in the travel industry, and technology companies also see growth opportunities in the space. As PhocusWire reported in May, AI-powered answer engine Perplexity partnered with Selfbook and Tripadvisor to let AI users book hotels.

“We are introducing answer modes in Perplexity to make the core search product even better for verticals: travel, shopping, places, images, videos, jobs,” Aravind Srinivas, co-founder and CEO of Perplexity, said in a post on LinkedIn.

“The next step is to get super precise [so] that you don't have to press on these tabs.”

Perplexity is already pondering how to incentivize booking adoption, Srinivas said. “We plan to bring some benefits to our Pro users like discounts on hotel bookings done natively on Perplexity. More on this soon.”

Moving from AI experimentation to integration

For large hotel chains, the next challenge is moving beyond pilots to enterprise integration, with rising interest in robotic process automation, proactive AI agents and digital identity verification. For independents, expansion plans center on intelligent energy management, more guest communication automation and advanced marketing tools.

Both studies suggest early AI adopters in the hospitality space can capture a competitive advantage. For global hotel groups as much as for family-run inns, the key will be developing an AI strategy that works business before competitors do.

Note: This story first appeared on Phocuswire