Is AI Hotel Bookings About to Break the OTA Monopoly!? ....and Finally Power Direct Revenue back to Hotels?

For years, hotels have fought an uphill battle against online travel agencies (OTAs). OTAs have built vast customer ecosystems, bidding aggressively on Google Ads, dominating search results, and taking a commission from every booking.

Many hoteliers feel resigned to this reality, believing the digital landscape is simply built to favour intermediaries.

But the rise of generative AI and large language models (LLMs) could be the first true equaliser the industry has seen in over a decade.

OTA's may start feeling like John Connor.

The AI Advantage for Boutique Hotels

I know you've heard it everywhere! The media and investors would have you believe that AI is both going to save us and mark our demise. But for small boutique hotels competing in an ever harsher hospitality climate, AI could provide the edge needed not just to survive but to thrive.

Why AI Matters

AI isn’t just automating operations; it’s changing how people search today. If that change continues on its current trajectory, hotels that invest in their digital presence could find themselves winning back the very customers OTAs rely on.

The Old Game: Endless Browsing and OTA Dominance

Let’s start with how travellers actually book. A recent Expedia-backed study revealed that travellers spend, on average, approximately five hours researching a trip in the 45 days before booking a hotel. During that period, they view roughly 277 different web pages.

That’s an exhausting process. It explains why OTAs became dominant: they offer comparison, convenience, and the illusion of choice in a single click.

Yet, data from APH shows that the balance is already shifting. 51% of UK travellers now book directly through hotel or airline websites, compared with 48% via OTAs.

It’s not a huge gap, but it’s the first sign of real movement back toward direct channels.

Why the Shift?

The modern traveller is more informed, reputation-conscious, and less trusting of middlemen. 81% of travellers say they always read reviews before booking, and 70.9% say a brand’s online reputation strongly influences their final decision. Reputation and visibility are replacing convenience as the dominant buying triggers, and that’s exactly where AI comes in.

The AI Hotel Bookings Search Revolution... No One Saw Coming!

Until recently, travellers started their research on Google, typing phrases like “luxury hotel near Glencoe” or “best spa hotels in London.” The top results would inevitably be OTAs. But that model is already cracking.

A growing number of travellers are skipping the search bar entirely and asking AI assistants or chatbots instead. From ChatGPT and Perplexity to the new wave of AI-powered Google “Overviews,” the future traveller is likely to say:

“Find me a boutique hotel with a great spa and mountain views near Glencoe. Ideally family-run, highly rated, and with good food.”

That instant shift in search behaviour changes everything the OTA industry has relied on for the past 10 years.

Instead of endless scrolling, prospective travellers are now turning to AI, which condenses results into a few very specific, reputation-driven suggestions.

Why Should You Care?

All the AI search is going to appreciate and potentially favour your hotel if it is well-reviewed, clearly described online, and has structured data that AI can interpret. This could potentially place your hotel in that shortlist that the average person sees.

In other words, AI is eroding the comparison-shopping advantage OTAs have relied on for years. It’s beginning to reward authenticity, transparency, and brand authority—traits that independent hotels already excel at when they’re digitally prepared.

The Data Behind the Shift

Recent data gives us a glimpse of what’s ahead:

• Around 52% of U.S. adults have already used an LLM such as ChatGPT.

• Of those users, 67% say they use it “like a search engine” to discover or research products and services.

• Google’s own AI Overviews now appear in roughly 18% of all search queries.

• Visitors coming through LLM-driven results are 4.4× more valuable on average than traditional organic visitors, and they convert faster and with more confidence.

  
  

That confidence factor is critical. Travellers who see a hotel name recommended by AI, backed by visible reviews, local reputation, and brand clarity, often feel reassured enough to book directly.

As the volume of AI-powered searches rises, so too does the opportunity for hotels to build direct relationships with guests before they ever reach an OTA listing.

Why AI Could Be the Golden Bullet (If Used Wisely)

AI isn’t automatically going to destroy OTAs. But it does fundamentally challenge their model. OTAs thrive on two things: massive ad spend and aggregation. AI search breaks both.

Instead of aggregating hundreds of results, it summarises the best ones. That’s a subtle but revolutionary shift. For hotels, that means visibility is no longer purely about paying for placement; it’s about being relevant, trusted, and well-represented online.

When AI starts prioritising reputation signals—guest reviews, consistent branding, structured data, and website usability—hotels that have invested in these foundations will dominate LLM recommendations.

It’s not a silver bullet. It’s a loaded opportunity waiting for the hotels who are ready to seize it.

What Smart Hoteliers Should Do Now

The biggest mistake the industry could make is waiting for AI to “settle down.” In reality, this is the perfect window to prepare before OTAs adapt and before the AI models mature even further. Here’s where hotels can take the lead:

1. Strengthen Your Direct Booking Experience

Your website isn’t just a brochure anymore; it’s your conversion engine. Make sure it’s fast, visually strong, mobile-optimised, and integrated with a modern booking system. Travellers arriving from AI-driven search will expect seamless performance and trust signals at every step.

2. Build Reputation as Your Currency

Since AI draws from public data, your online reputation becomes your ranking factor. Respond to reviews, encourage satisfied guests to leave feedback, and manage your brand presence across Google, TripAdvisor, and social platforms. (or have a conversation about having this managed on your behalf). The cleaner and more consistent your reputation data, the more likely AI will identify your property as “recommended.”

3. Speak the AI’s Language

Use structured data (schema markup) so your website communicates clearly with AI and search engines. Include details like property type, amenities, location, and room descriptions in a format AIs can read and cross-reference.

4. Create Genuine, Branded Content

Publish content that answers traveller intent: local guides, experiences, and behind-the-scenes stories. AI models love credible, useful content. The more unique your site feels, the higher the chance it’s referenced when a traveller asks for recommendations. If you have unique local business neighbours, find out how you can partner together and offer packages that reaffirm your local connections.

5. Optimise for Voice and Conversational Search

People will increasingly “talk” to AI when planning trips. Ensure your copy, meta descriptions, and FAQ content sound natural and conversational.

Why It’s Not a Guarantee (Yet)

Let’s stay realistic. OTAs aren’t disappearing overnight. They’ll integrate AI faster than most independent hotels can. Their budgets will let them adapt and retain visibility. But the pattern is clear: travellers are changing how they discover and evaluate hotels, and the balance of influence is shifting away from generic listings toward reputation-led, AI-driven results.

For hoteliers, the choice is simple: wait for the next algorithm to dictate visibility, or actively shape how AI perceives your brand today.

The Opportunity Ahead

If even a fraction of the billions of OTA-driven searches move toward AI-powered results, the hotels best prepared for LLM discovery could see a measurable rise in direct bookings with lower commission costs and stronger guest relationships. That’s not a prediction; it’s a pattern already visible in early data. Hotels that align their digital strategy with how AI consumes and ranks information will have a clear edge over those that don’t.

Where Codero Fits In

At Codero, we’ve been watching this shift closely. We're here to help boutique and independent hotels transition from OTA dependence to sustainable, high-converting direct revenue, ensuring a strong ROI in the process.

Through smart web design, SEO optimisation, review management, and performance tracking, we make sure your hotel is visible not just to guests but to the AIs that guide them.

If you’re curious where your hotel stands in this new landscape, start with something simple: request a complimentary digital visibility audit. We’ll show you how your brand appears to AI-powered systems and where you can strengthen direct booking performance.

Because the hotels that adapt now won’t just survive the AI shift; they’ll own it.

(This article was written by Graeme Grant (Director of Codero Ltd) with support from AI!)