The Rise of Agentic AI in Hospitality: Moving From Search to Action

The digital landscape of travel is shifting beneath our feet. For the past two decades, the battleground for hotel bookings has been the search engine results page. Hoteliers have spent countless hours and significant budgets optimizing for keywords, bidding against OTAs, and refining the “look to book” ratio on their websites. However, a fundamental change is on the horizon. We are moving from an era of search to an era of action. This shift is driven by the emergence of AI agents in hospitality.

Recently, industry conversations have intensified regarding the role of Large Language Models (LLMs) in travel. A pivotal moment in this discourse occurred during a recent interview between Sam Altman, CEO of OpenAI, and economist Tyler Cowen. Their discussion, alongside articles from PhocusWire and McKinsey, paints a picture of a future in which booking friction disappears. For hoteliers, understanding this shift is no longer optional. It is a strategic necessity.

Takeaways

Agentic AI acts independently, guiding guests from intent to confirmed hotel booking.

Hotel booking is becoming a basic automated utility within broader AI-powered travel journeys.

Trust will outperform ads as unbiased AI recommendations shape booking decisions.

Hotels need modern, API-ready systems to stay visible to AI agents.

SEO is shifting toward structured, factual data optimized for AI interpretation.

From chatbots to Agentic AI

To understand where we are going, we must first recognize the limitations of where we have been. Most hoteliers are familiar with the first generation of chatbots. These were essentially scripted decision trees. They could answer basic FAQs about pool hours or check-out times. Occasionally, they could hand off a booking request to a human agent.

However, they lacked true agency. They could not “think” or navigate complex, multi-step workflows across different websites.

This is where the concept of “Agentic AI” enters the narrative. According to recent insights from McKinsey, we are moving toward systems that possess cognitive capabilities. These agents can break down high-level goals into sub-tasks. For example, a traveler might say, Book a hotel in Madrid for next Tuesday that has a gym and is near the company office, but keep it under €200.

In the past, a search engine would give you a list. You would have to filter, check maps, compare prices, and finally book. An AI agent, however, understands the intent. It navigates the necessary APIs, verifies availability, and completes the transaction.

This transition from informational retrieval to transactional execution is the defining characteristic of AI agents in hospitality. It promises to reclaim the time travelers spend planning, which currently takes hours, and condenses it into seconds.

Sam Altman and the “Utility” of booking

The potential for AI to handle bookings is not just theoretical. It is a core use case discussed by the technology’s creators. In his conversation with Tyler Cowen, Sam Altman touched upon the economic value of AI. He used hotel booking as a primary example of a “simple utility.”

Altman noted that while some users might only ever use AI to book hotels, the technology offers far more. He stated, Maybe ChatGPT and hotel booking and whatever else is not the best way we can make money. In fact, I’m certain it’s not. I do think it’s a very important thing to do for the world.

This quote is revealing for two reasons.

First, it confirms that the transaction, the actual booking, is viewed by tech leaders as a commodity. It is a utility task to be automated. For hoteliers, this is good news. It suggests a future where the friction of the booking engine is removed. The AI handles the boring form-filling parts.

Second, Altman hints that OpenAI is not necessarily looking to become an OTA in the traditional sense. They are not seeking to maximize economic extraction from every hotel booking. Instead, they view it as a necessary function of a helpful assistant. This could potentially disrupt the high-commission models of current intermediaries if the AI agent connects directly to hotel suppliers.

Ads vs. Recommendations

A critical component of this new ecosystem is trust. In the traditional search model, users are accustomed to seeing sponsored results at the top of the page. We know that the first hotel listed on Expedia or Google is often there because they paid for the placement, not necessarily because it is the best fit.

In the Conversations with Tyler interview, the subject of advertising within AI models was raised. Altman referenced a “bad” type of ad. This likely alludes to a scenario where an AI recommendation is biased by payment, for example, recommending a Super 6 property when the user asked for a luxury experience, simply because the chain paid for the suggestion.

Altman expressed caution about this revenue model. There are kinds of ads that I think would be very good or pretty good to do, he noted, but emphasized that ads are likely not their biggest revenue opportunity.

This distinction is vital for the hospitality industry.

If AI agents in hospitality operate on a model of trust rather than paid placement, the product’s merit returns to the forefront. The AI will recommend a property because it genuinely matches the user’s specific request, specifically regarding location, amenities, and sentiment analysis from reviews.

Therefore, the hotel with the best actual guest experience wins, not just the hotel with the biggest marketing budget.

Live Integrations

While the philosophy of AI booking is fascinating, the technical execution is already underway. A recent article from PhocusWire highlights that hotels and tech vendors are aggressively pushing for live ChatGPT integrations.

The industry is moving past the “inspiration” phase. Initially, users asked ChatGPT for itineraries (“Give me a 3-day guide to Tokyo”). Now, the focus is on making those results bookable.

Hotels are beginning to plug their booking engines directly into these conversational interfaces. This creates a seamless path to purchase. A user reading about a hotel in a chat interface can click a button or simply tell the bot “book it”, and the reservation is created.

This requires a robust technical backend. Hotels sitting on legacy, on-premise systems with poor API connectivity will be left behind. To participate in the agentic economy, your inventory, rates, and availability must be accessible to digital agents in real time.

The Agentic shift

McKinsey’s analysis on “remapping travel” further supports this trajectory. They argue that Agentic AI will fundamentally change the distribution funnel.

Currently, the funnel is wide at the top and narrows down to booking. However, the journey is disjointed. A traveler visits an average of 38 websites before booking. Agentic AI collapses this funnel. The dreaming, planning, and booking happen in a single, continuous conversation.

For the hotelier, this means the “billboard effect” of listing on many OTAs might diminish in value. Instead, the “data effect” becomes paramount. Is your hotel’s data structured in a way that an AI can read and understand?

If an AI agent searches for “a quiet hotel with a co-working space and vegan breakfast,” and your website data doesn’t explicitly tag these attributes, you do not exist to the agent.

OTAs just got stronger. Guests can discover and book without ever leaving ChatGPT. That means more reliance on Booking.com and Expedia. Hotels can’t miss this opportunity.

The Rise of Agentic AI in Hospitality: Moving From Search to Action OTAs just got stronger. Guests can discover and book without ever leaving ChatGPT. That means more reliance on Booking.com and Expedia. Hotels can’t miss this opportunity.

Why this matters for hoteliers now

It is easy to dismiss this as future-gazing. However, the speed of adoption suggests otherwise. The pragmatic implications for hoteliers are immediate and significant.

1. The Shift in SEO Strategy

Search Engine Optimization (SEO) is evolving into Answer Engine Optimization (AEO). You are no longer writing just for humans. You are writing for the agents that assist humans. Your content needs to be clear, factual, and structured. Ambiguous marketing fluff (“experience true luxury”) is less valuable to an AI than specific details (“24-hour concierge, 400-thread count sheets, in-room espresso machines”).

2. The Importance of Structured Data

Your property management system (PMS) and central reservation system (CRS) are your sources of truth. If your amenities, room types, and policies are not accurate in these systems, the AI agent cannot sell your rooms. Clean data is the fuel for AI agents in hospitality.

3. Personalization at Scale

Hotels have always strived for personalization. AI agents deliver it. If a guest shares their preferences with their AI assistant, that assistant can pass those preferences to the hotel at the time of booking. This allows the hotel to prepare the room exactly as requested, without the guest ever having to call the front desk.

4. Direct Booking Opportunities

If OpenAI and other LLM providers prioritize utility and user experience over ad revenue, there is an opening for direct bookings. A neutral AI agent has no incentive to route a booking through a high-commission OTA if the direct connection is faster and offers better value to the user.

Preparing for the Agentic era

How does a hotelier prepare for this shift?

First, audit your tech stack. Ensure your connectivity is cloud-based and API-first. Closed systems will be invisible to the new digital workforce.

Second, audit your content. Look at your website and your listings. Are they answering the specific questions a guest might ask? Do you have comprehensive FAQs? Is your schema markup up to date?

Third, monitor the landscape. The major players, Google, Microsoft, OpenAI, and various travel tech vendors, are moving quickly. Integrations that seem impossible today will be standard features in six months.

Final words

The introduction of Agentic AI into the travel ecosystem represents a return to service.

For too long, the digital booking experience has been a burden on the guest. It has required them to be their own travel agent, data analyst, and administrative assistant. AI removes this burden. It restores the “hospitality” to the booking process.

Sam Altman’s view of booking as a “utility” is correct. The transaction should be invisible. The value of a hotel is not in how well its booking engine works, but in the experience it provides once the guest arrives. By embracing these new technologies, hoteliers can stop worrying about the form-filling and start focusing on the feeling.

The technology is complex. The goal is simple. We are using artificial intelligence to enable human connection.