AI Is Exposing Travel’s Weak Spots — Not Fixing Them

On Monday’s Good Morning Hospitality, A Skift Podcast, Wil Slickers, Michael Goldin, Brandreth Canaley, and Jamie Lane break down how AI is putting pressure on every corner of the travel industry. The conversation starts with Mews’ founder calling out hotels for taking a surface-level approach to AI, focusing on chatbots instead of meaningful improvements to operations and guest experience.

They also unpack why Expedia Group’s CEO says travelers still don’t trust AI to handle bookings, reinforcing the importance of reliability

This episode is presented by ⁠⁠Cloudbeds⁠⁠, Bilt⁠⁠, and StayFi.

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Good morning.

Happy Monday.

Happy Monday, best day of the week. It’s a, we’re down, we’re down a co-host. It’s a Jamie and Brandy episode.

Michael is jetting off to London right now for the Shorts Day Summit, right?

Shorts Day Summit, yeah. Hosted by our good friends, Leo and Sarah up on stage this year.

Very fun, very fun.

1:30

Weekend Recap Guest Story

How was your weekend? Did you do anything fun?

Yeah, it’s my birthday tomorrow, so we went up to the Mountain House, our short-term rental, hung out with some friends and went hiking and did all the fun North Georgia stuff. How about your weekend?

I cooked a lot this weekend. I made ravioli from scratch, which I haven’t done in a long time. I did a pea lemon burrata filling with chive oil.

It was very good and had good friends over for dinner. I haven’t done that in a while. We’re in the spring of deception right now in Boston, if anyone’s in the Northeast because it’s gorgeous out, but it is 47 degrees.

It’s a bummer.

We got that entire East Coast chill. I was old yesterday. I do have a fun guest story though, if you have a second.

Yes.

Your guest gossip, I want to hear.

We’re not guest gossip. Just want to call out, I feel like I’ve got the perfect guest. This guy, John, he’s in his 70s.

I think I’ve talked about him in the past. He likes to call me in chat, which is weird for a guest who just want to call and chat. But why he is the perfect guest?

One, he only books direct. He books multiple months in advance, and he books midweek during off-peak times.

Beautiful. That’s incredible. That’s really like, what more could you want?

What is he coming to the house? He just likes to hike or is he there for like-

He likes to fish. He likes to fish.

Okay.

Yeah. Sometimes he just comes with his wife, sometimes he comes with his friends, and they just like the house. I’ve got them set up on my direct booking site now.

They don’t like to travel on the weekends, they don’t like to fish on the weekends because it’s crowded. So John, book anytime.

Yeah. Are you going to give him some discounts, some returning guests discounts?

He definitely gets the discount. Yeah. He’s the only person who’s ever booked direct with me through my website.

So I just like, keep coming, John. I need more John’s.

I love that. Well, a quick shout out to Paul Manzi, as always tuning in. He said it was 22 in Minnesota this weekend, so I guess you win the fall-spring wars this morning because that’s very cold.

But we have some fun topics to get into. Of course, AI is in the news, again, shocking, but some interesting articles about what’s going on inside hotel franchises and how that is kind of paralleled to the short-term rental industry.

But before we jump in, I want to give a shout out to our APO sponsor, Vrbo. We love them.

Right now, if you list an eligible property on Vrbo using the link in the show notes, which is vrbo.com/goodmorning, you can earn one key cash for your next trip. So in addition to sponsoring the show, you can also get some free money.

We always love having them support the show and love everybody over on their team. So I think before we jump in, usually we put your stat of the day somewhere in the show, but it’s not related to any of our topics.

So I think, why don’t we start off top of the show?

4:51

World Cup Supply Update

What is the stat of the week?

30 percent.

30 percent. Oh gosh, I don’t have Michael on here to help me out. 30 percent, is that a decline in?

No. Not a decline. Okay, tell me what it is.

You’re never going to guess.

Okay.

I’ll be out of my misery.

Yeah. It’s been another week of doing constant World Cup interviews for me. So all my top of the mind is what’s going on the World Cup.

So through end of March, we have seen now a 30 percent increase in overall supply in Kansas City. So it is still the market leading the way. We’ve seen 12 percent increase in supply in Jersey City, 12 percent Fort Worth and Dallas.

So there’s a few markets, they’re just accelerating around World Cup demand and adding more supply into those markets.

So yeah. It’s interesting that, so I don’t know if this is just the news bubble that I’ve been in, but I’ve been seeing all sorts of things about demand not meeting expectations. Is that just clickbaity stories or is there some truth to that?

Yeah.

Most of it’s clickbaity stories. I think everyone wants World Cup demand to happen six months in advance. Wouldn’t we all love demand to just show up six months in advance?

Exactly. Now, we’re in the 30 days before, it was like 50-something days before the start of the World Cup. Everyone’s, I think, doing that sort of look around like, all right, are you booked?

I’m not booked? What’s happening? In the reality for hotels, and the public hotel CEOs have been very clear about this.

They did not expect demand to show up in the 30 days prior to the start of the World Cup. That’s the prior to group stage. World Cup is like, it’s a month and a half long event.

A lot of the demand is not going to happen until bookings are not going to happen to the last minute.

Well, until you know that they’re going to be, you’re not going to pay those rates and be like, maybe. I mean, it’ll be interesting to see.

In the Northeast, there’s all sorts of chatter about all of the transportation woes around this because like FIFA isn’t…

I mean, I have lots of feelings about FIFA as an organization, but just basically having all of these municipalities or cities be on the hook for the enormous transportation costs. And I think that’s just ridiculous.

And then you can’t have regular commuters on the… I’m not going to… I’m going to try to leave Boston because everyone’s like, Fox Borough is not in Boston.

I’m like, I know, but all the people are going to be staying here. If you haven’t bought hotels, look in Providence. That’s actually way closer.

Yeah, for all of our international soccer fans.

8:11

AI in Hospitality

But okay, so our first topic for today, as an article written by Luke Martin from Skift about what hotels are getting wrong about AI. And it’s a really interesting interview or conversation with Richard Vaulter.

And I actually agree a lot about what he was saying, and kind of saying that there isn’t a lot of imagination with how AI is being deployed in the space.

And I think we’ve said this a lot, like there’s a lot of just like, oh, here’s my app, or here’s my chat bot, or whatever. And I think it’s not a hot take, there’s a lot of speculation and hot air in the AI space.

It’s just a lot of what can we do to shoot up our stock price, not just in the whole travel industry, but in general, but what is the technology actually doing? And so I think that’s a really good point that we haven’t really seen.

I mean, hopefully this isn’t the peak of what the disruption is going to be.

At least it’s not like all birds in the short-term industry is like…

Oh my God. I was so annoyed when I saw that. I was just like, this is the most tech bro BS I have ever seen.

Oh my God. Yeah, that was ridiculous.

But I agree, the imagination is pretty weak so far, at least on the short-term, our hotel and short-term middle discovery side. The article gets into how you go across the major chains, and even the OTAs, are AI in the booking discovery process?

Essentially, I can type in or maybe even speech to text, and talk about what I’m looking to book, and then it’s going to find me those either hotels or short-terminals.

We have moved from specific and let’s say dates, amenity filters, and property type to I’ve got to, which is clickable, right?

Maybe I’m going to do like six clicks, so now I’m going to type in like, I want to a spacious place with bunk beds and board games.

And maybe it gives me a lot more flexibility in terms of what I can search for versus this sort of structured amenities.

But ultimately, like, I don’t think it’s a significantly better experience for the guest trying to find, and maybe you can find more unique properties or more properties with really specific types of offerings.

But for the vast majority of search, like, I don’t think this is like a step and function better than what was already there with some filters.

Yeah, I agree. And, you know, he also mentions, like, that in general, the AI industry is in its, like, hyper building phase and that no one knows what that’s going to look like in a year or two.

And so I think we have it, there’s probably there’s applications that we haven’t even, you know, thought of yet.

And I think, I don’t know, for me personally, what I find to be just annoying is like the certainty and, I don’t know, pride that people are talking, like that they have solved all the problems that AI has just like come, it’s totally at its, like,

revolutionary stage right now. And it’s like, it’s, I mean, it’s certainly disrupting, but like, we’re obviously not at, like, the peak of what it’s going to be or like what it’s fully capable of.

And so the definitive nature with which all of these companies talk about, you know, talk about it is, I think, a little frustrating because it definitely just sounds like it’s sound bites for, you know, whatever finance talk show or podcast or

Yeah.

And ultimately, as much as I love all these OTA, shout out, shout out, Vrbo sponsor, shout out all the others. Like, I don’t, in my heart of heart, believe that they’re the ones that are going to create the innovation.

I think the innovation in search is probably going to come from some small startup, the Vibe Coding today, and they’re going to launch, like, this new way to search, discover, travel.

And then all the OTAs are probably just going to copy what they came up with anyway. And then incorporate it into their site.

Let’s get acquired. And then, you know, well, I thought it was really interesting, something that was mentioned in the article, that there will be companies that morph into lifestyle management agents.

And there’s, okay, part of me is just so annoyed at how much technology really is in like, like the every second of your day has to be managed by an app. But then I also get it.

Like, I can totally see that if I have one, if I can do all of my things in one app that manages, like, my gym scheduling and, you know, all of my travel that I have coming up, and maybe it’s my personal budgeting software or whatever.

Like, if I can really manage my life in one app, that would be pretty sweet.

And, but to your point, I don’t know if it’s going to be any of these companies that we think of today, or even if it’s someone vibe coding in their garage right now, because I think that so many people are able to build these apps.

I have a friend who is currently building his own budgeting software, and he’s just doing that for fun, and that’s probably going to be better than what you can buy right now.

And it’s personalized, and if you want a new feature, you can build that feature into it probably with a prompt that is good enough to find you a booking as well.

So these little prompts, and it’s incredible, what it can build and customize your software. So I totally agree.

But to bring it to the STR industry, now we’re talking about all these things.

I’ve always felt that in the last couple of years, the STR industry has had some really interesting technology, and certainly outdoing hotels in the sense of experimenting with new tech, but now it seems that everything is just outdated.

Like how on earth are these companies able to… I mean, you’re in the software game. Like how are companies supposed to keep up if by the time you build something, it’s already almost like obsolete or outdated?

No, it’s…

Because we’re in it on the day-to-day basis, building new feature functionality. And like what we thought we were building two months ago is now morphing into something different.

But the fact that coding is happening so much faster, like you can pivot so much faster.

Like our product managers now, like and shout out to Jordan, like we’re building this new piece of software and he’s got the entire thing essentially vibe coded out.

Like before even our software developers touch it, like we are like, oh, what happens you click this? Like it’s essentially done. And the software team has even started on it yet, and they’re just going to make it that much better.

Like our design team hasn’t started on it. Like we’re able to iterate so much faster in terms of how this stuff builds. Like what if we move that over here?

What if we make it do this, this and this? And then instead of working with wire flames, we’re like fake clicking around. It’s like, no, like we’ve got a fully working prototype that’s actually doing it.

And all before like we even like begin developing it, it’s incredible how much faster you can move now building software.

Yeah, also just that point, you just made like the difference between like wireframes and then like an actual functioning app that like if you just used it for you, like it would work is really crazy.

And that’s I’ve been playing and like learning how to like do stuff in cursor and stuff and it’s just it’s kind of wild that I’m just like stream of consciousness talking at this thing and then a real product is coming and I’m not even I don’t have

the like knowledge of how to build these sites like actual, you know, correctly. So yeah, I think there’s a lot, you know, a lot to be seen and it will be interesting like if these key players, especially the software players, I know that we talk

And then it all goes back to in my mind, like you can build these feature functionalities, you can do it yourself, but then like you get to, okay, now I’ve got to maintain this software.

I’ve got to work with all my other softwares. Like first, like the PMSs or the RMS, all these other companies, like seeing these softwares being developed and then just incorporating that feature functionality into their tools so much quicker.

Like they’ve got so many developers working.

So like we’re doing, like we’re keeping an eye out, like what are all the things people are doing around the acquisition side, the investment side, the revenue management side, and what should we be incorporating into our feature functionality, given

what people are building today? And it’s just like, and it makes the iterative process that much faster.

And that’s where like the OTAs I think are keeping, and whether it’s in the hotel companies, like seeing what people are doing, seeing what people want to do. And in terms of their search process, and then incorporating that all in. Yeah.

Well, if you’re listening and you have a cool thing that you’re vibe coding, let us know.

I’m always curious as to what people are doing. And because people are coming up with some really crazy out of the box stuff.

18:24

Hospitality Financial Squeeze

Well, kind of in a not as optimistic side of things. There’s another great article that Sarah Coppett wrote about the squeeze that’s happening in the hotel side of things, like actual hotel owners, not the flags.

And so this, we’ll let the hotel crew dive in on hotels, but this squeeze is also absolutely happening with homeowners and STR operators. So kind of what is your take on the financial squeeze that’s happening on our side of the industry?

Yeah. And I feel like Sarah, I did an amazing chart.

And I’m not sure if I will can do some magic and get this chart, but essentially showed like, like when Hilton spun off park, like, and you can see the subsequent change in value that happened for Hilton, which is assets light and then park hotels

that is asset heavy. It’s this chart right here. Amazing job, Will. So what we see is like this asset light business model where you don’t have to own the real estate.

You don’t have a lot of the or much any of the cost of actually operating these assets. And that business model since 2017 has just exploded. They’ve fived X their share value while the operation heavy.

So they’ve got the labor cost of operating these assets. They’ve got the asset like the actual real estate value.

Yeah, like the taxes.

The taxes, the property, whether it’s property taxes, whether it’s insurance, like all these things. And then they also have the franchise fees for operating one of these brands, which gets taken off the top line.

And you roll all that in and they’ve seen their value decrease by 20% over that same period.

It’s a really crazy chart. It’s like what, why would you want to operate? And then, you know, like, I mean, I just always, like any operator, SCRO hotel, I just always have such empathy.

I’m like, it’s just, it is always such a beat down. And then here you have it in like stark graph form.

And I think, you know, you made a comment before the show how we don’t necessarily talk about owner revenue and like the owner squeeze that happens in our industry. We’re always talking about from the companies.

But I think anyone who’s operating in the traditional vacation rental market, owners are, if there’s owner churn, it almost always has to do with a mismatch in what they think their revenue should be.

And I think that you, I, you know, we’ll have to see how things play out over the course of maybe the rest of this year.

But it’s like, they’re not going to be getting better results at another place, because you might have companies that are competing by really bringing down their commissions.

But a company that has drastically lowered their commission structure is not going to be able to sustain operating that business if they’re not making enough money to cover their costs.

Like there’s a reality of how much things are costing, not just for the company, but also for the owner.

Their, you know, the values of their homes might have gone down, especially if they bought during the pandemic, then they’re not getting the revenue. The cost of maintenance is going up, the cost of just any, like the supplies for their homes.

So there is like the same squeeze that’s happening for hotels is happening on this like micro level for STR owners as well.

I’m sure all the owners of brands, part of the stay Tara family would love to, that you can like articulate the squeeze that they’re happening.

Because I think all too often we hear property managers, and the business of property management is hard too, right?

They are getting squeezed, and the expenses and they’re having to pay the employees that are actually going in and cleaning the property. Like a lot of that and the software companies that they subscribe to are raising their fees.

And a lot of those business models don’t scale, like you get up to 200, 300, 400 properties, you think you’re going to get some economies of scales and operating your business, and it just becomes way more complicated and doesn’t actually scale.

So, yeah, there’s at all layers of the business and the squeeze happening. But I’m just like when you call out the hotel brands and asset light, not seeing a lot of the squeeze or as much of the squeeze.

You’re also seeing that in the OTAs, the Expedia, the bookings that are able also asset light, also in great businesses and it really, and I think came down to and it was like a last quote that Sarah pulled in that I thought really brought it

together well. It was from Ellie, the IHG CEO that I really called it out like, if someone’s not willing to be asset heavy, then they can’t be asset light and the game stops. So they have the incentive to make the asset heavy business work.

Like the OTAs have the incentive to make property management work. They have to and have it be profitable for the owners that are investing into assets that they’re doing.

So if they’re not driving enough guests into the platform, they’re not doing their aspect of the job. Like there’s a reason why, and when you look at the hotel side, that people want to be a Hilton or Marriott or IHG franchisee.

Like they get all the benefits of being part of that platform, all the loyalty members, they get a refinanceable asset, they get an ultimately a ton of benefits from being part of that brand.

And they’ve got to make sure that the benefit outweigh the overall cost.

Yeah, I think on an STR side, it might be interesting maybe a year from now when things have settled a little bit, but talking to some of the people that have bought Costco franchises, and it’s like, okay, so what does it like, are you seeing similar

things to what the hotels are seeing? Is there, are there some benefit, are things working differently?

Because you just, it’s, there just is this, it’s interesting because in the hotels, you just have, you have like the flag, the Hilton’s and the Marriott’s of the world, and then they have the asset owner and operator.

But in the STR world, you have another component. You have the owners, you have the property management company, then you might have the franchisee, or the, and then you have the OTAs and everything.

There’s more layers to it, and everybody, I think, is feeling a little pinched. And maybe to, you know, one of the thing I’ve, I dealing with owners, whether it was multi-family, or if it’s an intercom, it’s not my strong suit.

And, but I think that there might be, you know, if you’re an operator that’s losing owners to churn, I think there might have to be a re-education, and maybe more like pulling back the curtain of like, here’s what your commission is going to.

This is how much the software costs. This is how much the maintenance costs. Like this is how much all of this costs.

And then there has to be some sort of profit or else we won’t have a business. But all, you know, so it’s having the property management company have some sympathy for the owners.

And then that also needs to come back towards the property management company because everything is just getting, like a lot more difficult to manage. Yeah, so I, it’s, I don’t know, it feels kind of doom and gloomy to me.

But then I like, I don’t know, there has to be, you know, you were saying there’s, there has to be some incentive to keep the asset heavy portion going or else these asset like businesses have nothing, like that’s what they’re being built upon, you

Yeah, we’ll have to get Michael’s comment when he’s back because he is part of a hotel ownership group that runs in a brand.

And we’re essentially to say like, you know what? The brand isn’t going to give us enough value for the property that we have. Let’s run it independently where we don’t have to pay those fees and we can get our bookings elsewhere.

So, and that’s ultimately like if we start seeing a massive shift away in the hotel industry, away from the brands and towards running independently, that there’s enough resources out there to drive the bookings that you need without the brands and

Well, and I think another component of this is one that’s definitely playing out in the vacation rental industry is the generational turnover.

The kids or the next generation are not interested in these hotels or in the vacation rental company. And in the article, they’re talking to this woman like, why are we even doing this anymore? Like, what is the point?

And I’m like, oh, yeah, this existential question. So I mean, you think, I mean, that’s a lot, you know, that’s where a lot of these acquisitions are coming. People are like, oh, there isn’t the next generation to pass it on to.

And I think you like maybe the bigger question is like, why are these, why is the next generation of this hotel ownership or vacation rental ownership not interested in what appears to be a successful business that’s lasted for maybe decades?

And I think it was because we are seeing this like really kind of, yeah, like existential level change in the value that these businesses are giving to their owners.

28:20

Generational Ownership Shift

Yeah.

And I don’t see it too different than what we see across the service industry, right?

Sure. Yeah.

Your great grandfather started a car mechanic and like, grandpa, like, I don’t want to become a mechanic. I don’t want to be servicing this. Like, I don’t want to do your HVAC repair company.

I don’t want to do your, yeah, it’s fun that you really got into vacation rental management, but you know what? That’s not the path for me. And then grandpa or your dad gets to the end of the line of running it.

And then they’re looking to exit. And that’s a great opportunity for someone new that does want to get in.

Cause we do see, and there’s people every day, young people that do want to get into vacation rental management, do want to get into short-term rental management. They want to do it in a tech-forward way and that they-

Tech-enabled.

Tech-enabled.

Oh my eyes.

Let’s switch it from tech-enabled to AI-native way.

Oh my God. I just, there’s all these buzzwords just drive me insane. But yeah, AI-native is the new tech-enabled for sure.

For sure, for sure.

That’s so funny.

Well, yeah, I mean, again, excellent article. Really encourage all the listeners to go, even if you’re not in the hotel side of things, go and read this article. It’s really, really incredible.

It’ll be in the link in the show notes. But it is, I mean, the graphs alone are just pretty stark about what’s happening. And I’m sure over the coming years, we’re going to see how this plays out.

But Jamie, anything fun you’re doing this week?

No, I am again purposely not traveling. And I’ve got my fingers crossed for a Shorty’s Award tomorrow. What’s going to happen is, but-

You’re not going to be there to accept it.

I’m not going to be there to accept it though.

And it’s almost better because my boss is going to be there to accept it on my behalf.

I love that.

What better way going into annual reviews? Yes, exactly.

Remember that award that you picked up for me.

We’ll see. But happy to be around this week and a few more weeks without travel before. First trip coming up for the year for me is Verma Executive Summit in May.

Oh, yeah.

Nice.

How’s your week?

Oh, my God. I’m starting like a two-week gauntlet. I’m literally as soon as we hang up from this call, sprinting to a train to New Jersey for meetings I have tomorrow.

But it’s good. I get to see coworkers in person. I’m like, sometimes I get in a little squirrely in my apartment.

So I’m happy to take the train. Then VR Nation at the end of the month. Popping out to Denver.

Hopefully, you’ll see Will and Michael. Thank you, everyone, for tuning in. Again, thank you so much to Vrbo, our favorite sponsors.

Go to the link in the show notes to get your link to get some one key cash for signing up with them. As always, thank you to Paul for your live streaming comments and shout out to Annie and Seekhats.

I don’t know your full name, but thank you so much for commenting and tuning into the show and we will see you all next week.