What AI Search Really Means for Hotels and Why Rewards and Loyalty Are the Only Sustainable Advantage

Ellis Connolly, CRO at Laasie

If you run a hotel, chances are someone has already told you that AI search is going to change everything. They are not wrong. But they are also not being particularly helpful.

What I am seeing across the industry is a lot of anxiety paired with very little clarity. Hoteliers are being told to worry about AI, to optimize for AI, to prepare for AI, without anyone explaining what that actually means in practice. The result is predictable. People either ignore it or overreact to it.

The truth sits somewhere in the middle. AI search does change the rules, but it does not change human behavior. And if you understand that distinction, it becomes much easier to see where hotels still have control and where they do not.

How AI Search Changes the Decision Process

Let’s start with the most important shift. Traditional search was about discovery. AI search is about decisions.

For years, platforms like Google trained travelers to compare. You searched, you scanned ten blue links, maybe clicked a few OTAs, and eventually made a choice. Hotels fought for visibility, rankings, and clicks. Traffic was the prize.

AI search works differently. When a traveler asks ChatGPT or Perplexity where they should stay for a weekend in Austin, the system is not trying to educate them. It is trying to resolve their intent. It wants to recommend one or two options that feel like the right answer. Not the most optimized page. The most confident recommendation.

That distinction matters more than most people realize.

AI does not think like a marketer. It does not respond to brand adjectives or vague positioning statements. It is trained to reduce uncertainty. It looks for concrete value, consistency across sources, and signals that demonstrate why one option is better for a specific traveler in a specific moment.

This is where a lot of hotel messaging quietly breaks down. Phrases like “boutique luxury hotel in the heart of downtown” mean almost nothing in an AI-driven environment. Every hotel says that. AI cannot act on it.

But when a hotel can clearly say that direct bookers receive instant dining credits, guaranteed late checkout, or perks that are not available on third-party sites, that is different. Those are tangible benefits. They are easy to understand, easy to summarize, and easy to justify in a recommendation.

That is why rewards and loyalty suddenly matter far beyond retention.

Where the Playing Field Is Uneven

One of the uncomfortable realities for hotels is that OTAs are structurally well positioned for AI search today. Companies like Booking.com and Expedia already speak the language AI prefers. They have massive structured datasets, clear comparison logic, built-in reward mechanics, and years of conversion data to support their claims.

They can confidently say, “This option delivers better value for this traveler.” Most hotel websites cannot make that case as clearly, not because the hotel is worse, but because the value is often implied rather than explicit.

This is where loyalty needs to be reframed.

Instant Rewards Beat Points

For decades, loyalty programs were built for humans. Points made sense when travelers were willing to do the math, plan ahead, and stay within a single ecosystem. AI does not have patience for that kind of ambiguity.

Points raise questions. How many points is this stay worth. What can they be redeemed for. When can they be used. Are they meaningful if the traveler only stays once or twice a year.

Instant rewards remove all of that friction. A dining credit is a dining credit. Late checkout is late checkout. A complimentary drink is exactly what it sounds like.

These are binary benefits. They are either there or they are not. AI systems love that kind of clarity.

More importantly, travelers love it too.

One of the roles AI search increasingly plays is reducing decision fatigue. Travel planning is overwhelming. Too many options, too many tabs, too many tradeoffs. AI is designed to simplify. The hotels that make the decision easier are the ones that get recommended.

Clear rewards tied to direct booking do exactly that. They create an immediate reason to choose one hotel over another without forcing the traveler to dig deeper. They turn a “maybe” into a “that makes sense.”

Proof Matters More Than Promises

There is another layer here that is even more important, and it has nothing to do with perks on their own. Loyalty programs generate first-party data, and first-party data is quietly becoming one of the most important credibility signals in an AI-driven world.

AI systems rely on structured information. They trust patterns, not promises. Hotels that can demonstrate repeat behavior, engaged members, and ongoing relationships look more reliable than hotels that only show transactional stays.

When loyalty is done right, it produces evidence. Evidence that guests come back. Evidence that incentives influence behavior. Evidence that the brand delivers on its value proposition.

That kind of data does not just power marketing campaigns. It makes a hotel easier for AI to trust.

This is also why brand alone is no longer enough.

Beyond Branding: Proving Value to AI

Strong brands still matter. But AI does not care how long you have been around or how beautiful your photography is. It cares whether you are the right answer for this traveler, right now.

Loyalty and rewards act as a translation layer between your brand story and machine logic. They turn abstract positioning into concrete reasons to choose you. They give AI something to point to when it explains its recommendation.

This shift is especially important for independent and regional hotel groups. Global brands can afford inefficiency. Independents cannot.

AI search will compress the middle of the market. Hotels that fail to articulate clear, differentiated value will start to feel interchangeable. And interchangeable hotels lose pricing power. Once pricing power erodes, OTA dependency grows, and margins follow it down.

Loyalty is not about competing with the biggest brands on points or status tiers. It is about escaping commoditization altogether.

Building Defensible Value in AI Search

When I talk to hoteliers about AI search, I try to bring the conversation back to something very simple. AI is a filter. It decides what gets surfaced and what gets ignored. Rewards and loyalty are signals. They tell both travelers and machines why you matter.

Hotels that win in this next chapter will not be the ones chasing algorithms or stuffing content with AI buzzwords. They will be the ones that make their value obvious, immediate, and provable.

They will give travelers a reason to book direct. They will capture first-party relationships instead of one-off transactions. And they will make it easy for AI systems to recommend them with confidence.

AI search is not coming for hotels. But it is exposing weak value propositions very quickly.

The good news is that loyalty, when treated as infrastructure instead of a marketing afterthought, is one of the strongest defenses hotels have. Not just to retain guests, but to remain visible, relevant, and recommended in a world where fewer choices make it to the surface.

And the hotels that understand that early will not just survive the shift. They will shape it.