A new era of AI-assisted travel planning has begun. It’s more personalized, more contextual, and increasingly action-oriented.

NB: This is an report from Cloudbeds, one of our Expert Partners

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Hotels that fail to adapt risk losing visibility and bookings, while those that act early stand to gain a meaningful competitive advantage.

Cloudbeds have released The Signals Behind Hotel AI Recommendations report, the hospitality industry’s first comprehensive study examining how generative AI platforms recommend hotels to travelers.

The research comes as AI fundamentally transforms how guests discover and book accommodations. With travelers increasingly turning to AI assistants for personalized recommendations rather than traditional search methods, understanding these algorithms has become critical for hotel visibility and revenue generation.

Since Google’s launch in 1998, online search has been built on keywords, rankings, and backlinks. Generative AI is rewriting that playbook with personalized, real-time responses in natural language.

However, the rise of AI recommendations presents new challenges and opportunities for digital marketers. According to Ahrefs, a leader in SEO, 63% of websites now receive traffic from AI chatbots. However, these platforms often prioritize direct answers over external links, fueling the rise of “zero-click” results and reshaping how businesses are discovered online.

Generative AI in travel search

AI engines currently drive a small share of referral traffic to websites, but that share is growing rapidly, especially in the travel sector. According to Adobe, traffic from AI sources to U.S. travel and hospitality sites surged 1,700% between July 2023 and February 2024. Nearly 30% of travelers have already used genAI to plan a trip, and 84% say it enhanced their experience.

Rather than typing generic queries like “hotels in Paris” and sorting through search results, travelers can now ask chatbots more specific prompts, such as, “Where should I stay in Paris near the Eiffel Tower for a romantic anniversary trip for under $300/night?” In return, they receive highly personalized recommendations.

Even more transformative is the rise of agentic AI, which is just beginning. AI agents go beyond answering questions to taking action on behalf of users. Functioning like digital travel assistants, they can plan itineraries, book accommodations and tickets, and manage trip logistics in real-time.

What this means for hotels

With AI reshaping how travelers discover and evaluate accommodations, visibility and recommendations are becoming increasingly important alongside traditional rankings. As AI-driven search grows, hotels that don’t appear in responses risk being overlooked in travel planning.

Generative Engine Optimization (GEO) is, therefore, becoming an essential strategy for building presence across AI-powered platforms.

Read the full report from Cloudbeds here