More than half of hotels now use or are procuring generative AI, but fewer than one in 10 report reducing manual work by more than 30 per cent, according to The State of Distribution 2026 report. The study, released by RateGain Travel Technologies, the NYU School of Professional Studies Jonathan M. Tisch Center of Hospitality, and HEDNA, draws on responses from more than 270 hotel brands and 58,000 properties across 141 cities and 53 countries.
The third edition of the report examines technology investment, AI adoption, distribution challenges, and changing traveller behaviour across revenue management, marketing, distribution, and sales functions. While AI adoption has moved rapidly into hotel commercial operations, most properties are recording incremental gains rather than significant changes in how teams work.
The gap between buying AI and getting value
Trust, data privacy, and governance concerns are limiting the extent to which hotels allow AI systems to make decisions or act independently. More than 80 per cent of commercial teams continue to spend one to two days a week producing and analysing reports manually, while fewer than 30 per cent have invested in dedicated reporting tools.
"Buying AI is easy. Getting value from it is not, and this report shows most of the industry is still stuck between the two," said Bhanu Chopra, Founder and Managing Director, RateGain. "The advantage will not go to the hotels with the most tools. It will go to the ones that turn their technology into better decisions and give their teams their time back."
Hotel technology budgets are increasing, with spending focused primarily on improving existing systems, raising productivity, and reducing integration and vendor complexity rather than adding new platforms. Marketing, sales, distribution, and revenue management teams are collaborating more closely, although fragmented systems and vendor complexity continue to affect their operations.
Distribution channels and AI-originated search
Core infrastructure for direct bookings is nearly universal, but online travel agencies continue to generate close to twice the bookings of hotel-owned digital channels. AI-originated search is also contributing a measurable share of reservations, even as 55 per cent of hotels report no or only a minor change to their distribution strategy.
Mid-sized hotel chains emerged as a distinct area of focus in the report. These organisations reported stronger cross-functional alignment, greater reporting automation, and more mature AI governance. They also recorded the highest incidence of meaningful AI-led reductions in manual work.
The 2026 edition expands its benchmark to include generative AI and LLM adoption, trust and governance, booking attribution, traveller intent, behavioural pricing, data privacy, and regulatory compliance. The survey covers hotel commercial operations between December 1, 2024, and November 30, 2025.
Why this matters for hospitality and events professionals
The report confirms that AI tools are entering hotel operations at speed, but the productivity gains most teams expect have not yet materialised. For AI for hospitality and events professionals, the bottleneck is not technology availability - it is data fragmentation, manual reporting habits, and governance gaps that prevent teams from acting on AI outputs. Mid-sized chains are showing what works: tighter cross-functional alignment and investment in reporting automation before layering on more advanced tools. The opportunity sits in fixing those foundations first.
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