NASHVILLE, Tennessee — The hotel industry was marred by recurring uncertainties last year. But just because the tides have turned to more positive performance in 2026, the uncertainties have not all dissipated.
Artificial intelligence adoption, distribution channels and booking windows are examples of areas where revenue managers are trying to maximize performance and profits at their hotels.
AI, technology
As a relatively smaller company, it's been a challenge for Milwaukee-based Marcus Hotels & Resorts to parse out how it can utilize AI compared to larger companies and brand that have more resources, said Linda Gulrajani, the company's vice president of revenue strategy and distribution. Marcus manages 17 branded and independent hotels and has ownership interests in seven.
"How does AI impact independent hotels? How do we invest in the right tech stack to get prepared for AI? How do we divide our resources to deploy against AI? Because it's not free and it takes time to learn and it takes the right people," she said during a revenue management roundtable hosted by CoStar News Hotels at the recent Hotel Data Conference.
Smaller hotel companies have had to figure out how to implement AI on the fly. Lynsey Kreitzer, executive vice president of commercial strategy at New Hampshire-based operator Lark Hotels, said her company is "creating our own roadmap" when it comes to AI.
Lark operates 60 hotels and has ownership in 19, all independent.
That roadmap includes choosing the right partners to give Lark an edge over its competitors, she said. It's not just AI, though; it's building out a tech stack as a whole.
"It's got to be the right fit. It's got to drive direct business," Kreitzer said.
A big unknown is which distribution channel is the most optimal as travelers book more with AI tools, Gulrajani said. Brands and online travel agencies are vying for the top spot, but the choice isn't clear, yet.
"You're already starting to see ads on different AI tools, and it's kind of a little bit like the wild, wild West to me," she said.
The advent of AI tools has brought more data points than ever to the table. Sorting through that data and charting a strategy based on the insights is something revenue managers are in the process of figuring out, said Allison Frazier, vice president of revenue management at Atlanta-based private equity firm Peachtree Group. Peachtree owns 127 hotels and manages 130, all branded.
"It is about how to be efficient and how ... do you take all of this data, make it actionable and useful to actually setting strategies, actually understanding what's going on versus I've got all these reports," she said. "Hopefully that's where AI should be able to help us."
Keeping up with shifting booking windows
Booking windows across most segments are shorter than they were pre-pandemic, a shift that is constantly changing and keeping hotel revenue managers on their toes.
This change has empowered revenue managers to embrace flexibility in their strategies, Frazier said.
"The mix of business has shifted, the booking patterns have changed and continue to sometimes change," she said.
"We've shifted a little bit more, too," she said, in that the company's commercial teams talk a lot more about profitability than they used to.
Rather than just pushing for the highest average daily rate, hotel commercial teams down the line understand the cost of acquisition and distribution costs, she said. Sometimes if the cost to acquire business is too high, it's not worth the high rates they bring in.
It comes down to "really understanding your profitability and how, from a revenue team, we impact that by managing our channels, by managing our segmentation, and just making that be more of a culture within the company of how we train people, how we talk to people, what questions we ask," Frazier said.
Kreitzer said booking windows today depend on the traveler. The more high-intent travelers are booking several trips at a time months in advance, but midweek travel is lagging behind and "very last minute" in nature.
An adjustment to this for hotel revenue managers has been keeping midweek rates higher for longer.
"We're just trying to capture what's there," Kreitzer said. "That shift in mindset for the midweek — dropping a rate isn't creating demand."