Ringing the AI bell: 70% of independent hotels say tech is crucial to compete with major chains

Independent hospitality businesses are increasingly adopting artificial intelligence to compete with major hotel chains, with new research showing 70% of property owners view AI as crucial for staying competitive. The technology is democratizing tools once exclusive to large corporations, allowing boutique hotels, bed-and-breakfasts, and vacation rentals to streamline operations while preserving their personal touch.

What you should know: AI adoption among independent hospitality operators is driven by immediate efficiency gains and competitive necessity.

• Nearly 39% of current AI users say it provides a significant competitive edge, while 30% consider it essential for survival.
• Time savings and efficiency are the top reasons for adoption, followed by cost reduction and competitor advantage.
• Guest communication and chatbots represent the most common AI application, followed by marketing and social media management.

Key success metrics: Real-world implementations are delivering measurable results for independent properties.

• Saratoga Arms, a 30-room boutique hotel in upstate New York, achieved an 11% year-over-year increase in revenue per available room using AI-powered pricing.
• General Manager Rachel Paley reduced her manual pricing work from 15 hours per week to just minutes daily.
• The hotel industry average growth rate was just under 2% during the same period.

What they’re saying: Industry leaders emphasize AI’s role in leveling the competitive playing field.

• “With the amount of investment and innovation around AI tools, the technology today has democratized the technology landscape,” Bobby Marhamat, CEO of TakeUp, a hospitality technology company, told Newsweek.
• “Independents have a superpower that big brands don’t: agility. They’re not handcuffed to legacy tech stacks or corporate red tape.”
• Rachel Paley noted: “Staff morale has improved because they no longer feel like they’re ‘flying blind’ or under pressure to make quick, high-stakes pricing decisions without perfect data.”

Current barriers: Despite enthusiasm, adoption challenges persist across the independent hospitality sector.

• Roughly one-third of owners cite lack of technical expertise or staff training as their biggest hurdles.
• Cost concerns remain significant, with owners seeking lower upfront and subscription costs.
• Data privacy worries affect 15% of operators, particularly important for properties that trade on trust and intimacy.

The human touch remains central: Operators emphasize that AI enhances rather than replaces personal service.

• “Authentic hospitality isn’t about doing everything manually; it’s about being present when it matters most,” Marhamat explained.
• Properties use AI to handle routine tasks like check-in logistics and basic guest questions, freeing staff for personalized interactions.
• Saratoga Arms views “technology as a support, not a replacement for the human connection that’s a critical part of a Saratoga Arms stay.”

What’s next: Independent operators plan to expand AI implementation across multiple operational areas.

• Smart energy management leads planned expansions, followed by guest communication automation.
• Automated marketing campaigns and dynamic pricing tools are also priorities.
• AI-powered marketing optimization could help operators track performance across channels and eliminate wasted advertising spend.
• Marhamat believes AI will “level the playing field and then tilt it in favor of independents” by allowing focus on upgraded amenities and genuine human connection.