Here are few of the stories that caught our attention over the week with some of our takeaways. Watch the video for a summary or scroll down for the analysis.
Story 1
Hotel Distribution in 2025: The Channels Reshaping Your Guest Acquisition Strategy
Cloudbeds’ Market Pulse report for Fall 2025 delivers some uncomfortable truths about the distribution landscape that should prompt a reassessment of your channel strategy—particularly if you’ve assumed the balance between OTAs and direct bookings would stabilise.
The Asian and Latin American Surge
Four players have fundamentally altered the distribution equation in 2025. Expedia grew room-night volume by 12% year-on-year, but the genuinely disruptive shifts came from Trip.com, Hotelbeds, and Despegar, each posting growth exceeding 35%. These aren’t marginal adjustments—they represent substantial market share transfers that merit immediate strategic attention.
The geography behind these numbers matters enormously. Trip.com’s surge aligns with a 9% rise in international arrivals across Asia Pacific (excluding mainland China) in the first half of 2025. Meanwhile, Despegar’s momentum mirrors a 14% growth in international tourism to South America in Q2 2025. For independent hotels and smaller chains, this presents both a challenge and an opportunity: are you visible in the channels that are actually growing?
The wholesale sector tells an equally important story. Hotelbeds’ parent company reported double-digit growth, whilst WebBeds posted a 20% increase in bookings. The commercial implication is straightforward—bedbanks are expanding their reach, but at what cost to rate integrity? The same Expedia Group survey cited in the report found that 98% of hotels lost revenue to rate misuse over the past year.
Direct Bookings Face an Existential Threat
The 61% OTA to 39% direct split from 2024 has held relatively steady through 2025, but that stability masks a more worrying development. AI-powered search platforms—ChatGPT, Google’s AI Overviews, Perplexity—are inserting themselves at the very beginning of the traveller’s journey, precisely where direct booking strategies have traditionally attempted to intercept potential guests.
Recent integrations tell you everything you need to know about where this is heading. Tripadvisor partnered with Perplexity, whilst Booking.com and Expedia have embedded themselves into ChatGPT’s ecosystem. The result? AI platforms are funnelling traffic and revenue toward OTAs rather than hotel websites. Your metasearch investments and SEO strategies are being undermined before the guest even reaches a traditional search engine.
The Margin Squeeze Intensifies
After years of rate growth post-pandemic, pricing power has evaporated. “Real ADR”—adjusted for inflation—has declined for many operators. The channel-by-channel breakdown is revealing: whilst Expedia and Booking.com managed modest ADR increases, Vrbo declined 10%, Hotelbeds fell 5%, and Airbnb dropped 2%.
Global RevPAR rose just 2.8% year-to-date through August 2025, driven entirely by rate rather than occupancy, which remained flat. The hotel sector faces declining occupancy across key markets including China, France, Germany, and the United States. Shorter average lengths of stay—declining every month from January to July 2025—compound the revenue challenge, driven by tighter budgets, the “microcations” trend, and reduced remote work flexibility.
Labour costs continue their relentless climb: up 3.9% in Europe (now 60% of operating costs), 4.6% in North America (47% of costs), and a staggering 9.1% in Latin America (43% of costs). Hotels have successfully converted revenue gains into profit—all regions achieved positive flow-through in 2025—but the ability to sustain this amid flattening demand and rising costs defines the commercial challenge for 2026.
Story 2
Hotels vs. Airbnb: The Data Reveals a Permanently Divided Market
Engine’s analysis of the 2025 hospitality landscape confirms what many operators suspected but perhaps didn’t want to acknowledge—the competition between hotels and short-term rentals has reached a new equilibrium, one where both sectors occupy distinct, defensible territories rather than fighting for the same guest.
Airbnb’s Paradox: Corporate Success, Host-Level Struggle
Airbnb’s Q2 2025 financials present a study in contrasts. Revenue hit $3.1 billion, up 13% year-on-year. Gross Booking Value climbed to $23.5 billion, an 11% increase. Net income grew 16% to $642 million, yielding a 21% margin. By any measure, the platform is thriving.
Yet the host-level reality tells a different story. U.S. active listings reached a record 1.76 million in June 2025, a 6.1% year-on-year increase concentrated in rural (+23%) and suburban (+18%) markets, whilst urban listings declined 4% due to saturation and regulation. This supply glut has created an “occupancy paradox”—demand is growing, but individual host occupancy has softened from 57% in 2024 to approximately 50% in 2025.
Hosts responded by raising rates aggressively. U.S. STR ADR rose nearly 7% year-on-year in summer 2025, with another dataset showing a 24.88% surge between May 2024 and May 2025. This pricing power enabled RevPAR to climb 5-6% despite declining occupancy, demonstrating that guests will pay premium rates for the right property in the right location.
The Hotel Sector’s Deceleration
The traditional hotel industry entered what analysts are calling “The Great Deceleration” in 2025. CBRE slashed its U.S. RevPAR growth forecast from 1.8% to just 0.1%, projecting a 0.6% contraction in the second half. PwC forecasts full-year growth of merely 0.8%, whilst STR/Tourism Economics downgraded from 1.8% to 1.0%.
Monthly occupancy data confirms the pessimistic outlook: U.S. hotel occupancy fell year-on-year for four consecutive months—May (-0.7%), June (-1.7%), July (-1.0%), and August (-1.3%). Full-year 2025 occupancy is projected at 63.38%, fractionally above 2024’s 63% but significantly below 2019’s pre-pandemic 66%.
The margin squeeze hitting hotels is real and persistent. Rising labour, utility, supply, and insurance costs meet constrained pricing power—the 5.3% year-on-year increase in STR supply creates a ceiling on hotel rates. Nominal RevPAR has grown since 2019, but real, inflation-adjusted RevPAR is down 10.9% from pre-pandemic levels. Hotel margins are forecast to decline for the third consecutive year.
Where Each Sector Holds Advantage
The data reveals a bifurcated market where success depends on understanding your competitive position. Luxury properties outperform across both sectors—luxury hotel RevPAR grew 7.1% year-to-date through April 2025, whilst luxury STRs are the only price tier projected to see occupancy growth in fall 2025. Economy properties struggle in both categories.
The “bleisure” market—valued at approximately $500 billion and growing at 8-9% annually—structurally favours STRs. Half of all nights booked on STR platforms are for stays of a week or longer, where amenities like kitchens, workspaces, and laundry become essential. Airbnb’s share of business travel surged from 28% in 2019 to 44% in 2024.
Yet hotels retain decisive advantages in their core domains. Municipal regulations—exemplified by New York City’s Local Law 18, which caused STR listings to plummet over 90%—create protected zones for hotels in key urban markets. Hotels maintain higher absolute occupancy rates (~63.4% vs. 50-56% for STRs) and dominate short-stay, service-dependent, urban, and corporate travel.
The conclusion isn’t that either sector is “winning”—it’s that the market has segmented into distinct use cases where each offering has defensible competitive moats.
Story 3
ChatGPT Becomes a Booking Channel: What This Means for Hotel Distribution
On 6th October 2025, OpenAI launched its Apps SDK at DevDay, enabling third-party applications to operate directly within ChatGPT conversations—and two of the initial launch partners were Booking.com and Expedia, as reported by The Paypers.
Access to 800 Million Weekly Users
The commercial implications are staggering. ChatGPT has over 800 million weekly active users, and the integration provides these two OTAs with direct conversational access to this audience. This isn’t a referral model or an affiliate arrangement—it’s a fully functional booking tool embedded in the AI platform where travellers are increasingly beginning their research.
The AI tourism market is projected to reach approximately $13.87 billion by 2030, and this integration accelerates that trajectory. Tripadvisor is expected to join by year-end, further consolidating OTA presence in AI-powered travel planning.
The Geographic Constraint
Initial availability excludes the European Economic Area, Switzerland, and the United Kingdom, though OpenAI has stated its intention to expand to the EU. For hotels heavily dependent on European source markets, this provides a temporary buffer, but the direction of travel is clear.
The Central Question Remains Unanswered
Does AI-assisted travel planning fundamentally solve a friction point in the booking funnel, or does it simply add another layer to the discovery phase? The industry’s rush to integrate with AI platforms assumes a consumer need that may or may not exist in the form these tools currently take.
The comparison to OTAs displacing traditional travel agents is apt, but travel agents represented genuine friction—limited hours, commission-driven recommendations, cumbersome booking processes. What friction does ChatGPT solve that Google, metasearch engines, and mobile apps haven’t already addressed?
The risk for hotels is that AI integration reinforces OTA dominance without creating new value for travellers. If the result is merely a conversational interface wrapped around the same booking flow, hotels gain nothing whilst ceding even more control over the guest relationship.
Story 4
How Travel Leaders Are Actually Using AI in Their Daily Work
Breaking Travel News surveyed 11 travel industry leaders ahead of The Phocuswright Conference 2025 to understand how AI is transforming their daily operations, revealing a significant gap between aspirational AI use cases and practical, current applications.
Personal Productivity Precedes Enterprise Implementation
Adam Harris, CEO of Cloudbeds, uses AI to synthesise information and “pressure-test decisions.” Paul Jacobs of Kayak employs it to rewrite communications, noting the result is “shorter and punchier.” Mariano Dima, Chairman of Civitatis, described AI as “embedded in my everyday life, from searching, learning and developing new ideas.”
This personal adoption pattern informs enterprise strategy. Jeff Kim of Yanolja Group noted how the “everyday efficiencies” he experiences personally are being applied “at scale to create a more connected traveller experience.” The implication for hotel operators is clear—AI adoption begins with individual use cases before scaling to property-wide implementation.
High-Value Enterprise Applications
Sarosh Waghmar of Spotnana focuses AI strategy on “highly practical, high-value applications, including virtual travel agents and automated disruption handling.” Steve Schwab of Casago envisions AI that can “predict when a home is at risk of underperforming or flag guest friction before reviews”—applications directly transferable to hotel operations.
Adam Harris is building an internal “hotel sage”—an agent-based system trained on hospitality knowledge to answer any question about a property. This represents the kind of institutional knowledge capture that could fundamentally change training and operations.
The Adoption Philosophy Divide
Leadership approaches vary significantly. Steve Schwab maintains that “AI informs decisions, it doesn’t make them,” whilst Caroline Strachan of Festive Road stated, “I have a love-hate relationship with AI. I don’t want to lose my critical thinking ability.”
In contrast, Mariano Dima and Jeff Kim have deeply integrated AI into their workflows, viewing it as indispensable. For hotel operators evaluating AI adoption, this philosophical spectrum matters—are you implementing AI to augment human judgment or to automate decision-making?
Story 5
European Travel Sentiment: What Winter 2025 Bookings Reveal About Guest Behaviour
The European Travel Commission’s Wave report, covered by Hotel News Resource, analyses travel intentions for October 2025 to March 2026, revealing patterns that should inform revenue management and marketing strategies for properties across the continent.
The Southern European Off-Season Surge
52% of European travellers plan to visit Southern/Mediterranean Europe, a seven-point increase year-on-year. Spain has experienced a major boost, now chosen by 12% of travellers (+5 points), followed by Italy and France at 8% each. This represents a fundamental reorientation of off-season demand patterns.
The commercial opportunity is clear: coastal properties that traditionally close or significantly scale back operations from November to March should reassess this strategy. The data shows sustained demand for milder climates during the winter months, driven by both the “pleasant and stable weather” factor (cited by 15% of travellers, up 3 points) and climate change adaptation (76% of Europeans now adjust travel plans in response to climate concerns).
The Single-Trip, Single-Destination Trend
45% of Europeans plan to take only one holiday in the six-month period, a seven-point increase. Meanwhile, those planning three or more trips decreased by six points to 16%. Critically, 60% plan to stay in a single location for their entire trip, rising to 71% for city breaks and 68% for sun-and-beach holidays.
For hotels, this presents both challenge and opportunity. The challenge: fewer repeat visits within a short timeframe. The opportunity: longer stays concentrated in fewer properties. Revenue management strategies should emphasise extended-stay incentives and packages that encourage guests to remain at the property rather than using it as a base for multi-destination touring.
Budget Discipline Amid Maintained Priorities
82% of Europeans plan to maintain or increase travel budgets, indicating travel remains a spending priority. However, the proportion planning to spend over €1,500 has decreased by 4 percentage points to 35%. The top traveller concerns are rising trip costs due to inflation (21%) and personal financial situation (16%).
The spending breakdown remains consistent: accommodation (31%), food and drinks (22%), and activities at the destination (17%). For revenue managers, this suggests that whilst total trip spend may be constrained, the accommodation component maintains its share. Ancillary revenue opportunities in F&B and experiences remain critical to overall guest monetisation.
Geopolitical and Climate Factors Reshape Destination Choice
89% of Europeans report that geopolitical conflicts influence their travel choices, primarily by avoiding destinations with direct safety risks or potential disruptions. The ongoing Russia-Ukraine conflict is cited as a top concern by 14% of travellers.
Climate change drives adaptation for 76% of Europeans, with the most common responses being seeking destinations with milder temperatures (16%), checking weather forecasts before booking (16%), and avoiding extreme temperatures (15%). This climate consciousness reinforces the shift toward southern destinations during traditionally colder months and creates opportunities for properties that can credibly message around sustainable practices and comfortable year-round climates.
The Air Travel Resurgence
57% of Europeans prefer air travel, a 4% increase driven by speed (26%) and value for money (22%). This presents distribution challenges for properties in secondary and tertiary markets without convenient air access, whilst benefiting coastal and island destinations with improved flight connectivity.
The ETC’s recommendations for the sector emphasise extending tourism seasons, promoting lesser-known locations, incentivising sustainable transport, and implementing proactive crisis communication around geopolitical tensions. For individual properties, the actionable insight is clear: off-peak demand exists, particularly in mild-climate destinations, but requires targeted marketing to the right source markets with appropriate pricing and packaging strategies.