AI in the Hotel Industry: Local Factors Matter
Research conducted by the researchers shows that specific local conditions are crucial for hoteliers' willingness to implement AI-based dynamic pricing tools. This refers to solutions offered by online travel platforms. The researchers focused on the Genius program, a marketing tool from Booking.com, Poland's most popular booking platform. This program provides hotels with access to advanced algorithms that support revenue management. The study focused on the factors that determine hoteliers' decision to use such technologies.
Who Benefits, and Who Is Left Behind?
The research results show that large hotels in metropolitan areas and popular resorts are more likely to implement modern AI-based tools, particularly those offering premium services and possessing expertise in revenue management. Smaller, less prestigious properties often remain outside the Genius program, lacking the financial resources and know-how to effectively utilise AI algorithms. This exclusion translates into deepening price inequality and marginalising vulnerable regions.
Interests of Platforms vs. Interests of Hotels
Traditional revenue management tools focus on the profitability of hotels themselves. In contrast, the algorithms provided by global platforms like Booking.com primarily serve the platform's goals of boosting expansion and profits. As a result, hotels' interests often diverge from those of the platforms, increasing pressure on smaller properties and disrupting the industry's balance.
AI and the Future of Tourism
Artificial intelligence in the hotel industry is generating a lot of excitement, from enthusiastic opinions about its potential to concerns about the marginalisation of smaller players in the market. Researchers underline that excessive optimism must be tempered:
"Our research is to temper the over-enthusiasm surrounding the impact of AI on revenue and pricing management in the hotel industry. Raising awareness among managers, researchers, educators and trainers about how digital platforms control pricing decisions in tourist destinations can help inform a balanced approach to implementing AI-based technologies. We should better understand the role of operational knowledge, market position and location in the adoption of these solutions to mitigate the risk of further marginalisation of less-developed tourist destinations."
The development of technology should therefore go hand in hand with reflection on how to use AI to support local communities and hotels operating outside the mainstream. Developing practices that allow for more equitable access to digital tools will be crucial – ensuring that modern algorithms do not exacerbate existing inequalities but instead become an impetus for the sustainable development of tourism in various regions.
Fighting AI or Global Platforms?
Modern technologies don't have to exacerbate existing inequalities – they can support tourism development in a sustainable and equitable manner. However, it's crucial to make managers and decision-makers aware that the real challenge isn't AI itself, but rather the financial and intellectual barriers and dominance of global booking platforms. It's with these platforms that hotels and local communities will have to compete for influence and control over the tourism space.
The interview with Dr Tomasz Napierała is a part of a series of podcasts published on the Science Inspires channel. At the University of Lodz, we are increasingly focusing on this form of communication – the upcoming academic year will feature even more interviews with the UniLodz scientists and experts. Podcasts are a great way to see how research translates into everyday life and practical solutions in an accessible format.
Dr Tomasz Napierała is a geographer and an economist from the Faculty of Geographical Sciences, University of Lodz. He cooperates with the Portuguese CiTUR – Centre for Tourism Research, Development, and Innovation, actively participating in projects and international trips implemented under the Erasmus+ programme and European Economic Area grants. He has led and implemented numerous projects financed from regional, national and European funds, including the international SPOT – Sustainable Spatial Planning of Tourism Destinations project from 2019 to 2022. He is an author and co-author of expert opinions and strategic documents prepared for local governments and businesses.
Dr Maciej Adamiak is an Assistant Professor at the Institute of Urban Geography, Tourism Studies and Geoinformation, University of Lodz. He applies deep learning to spatial data analysis, including projects involving topographic change detection and the identification of illegal landfills using UAVs. He combines the development of artificial intelligence with practical environmental challenges and technological innovation.
Edit: Małgorzata Jasińska and Michał Gruda (Centre for External Relations and Social Responsibility of the University, University of Lodz)
