Next week, hospitality industry leaders, including investors, owners, lenders, developers, management and brand executives and the like will travel to Los Angeles to attend ALIS, the world’s leading and most influential hotel investment conference. While there, discussions will not debate whether AI matters. That conversation is over. The new question is where capital should be deployed in relation to AI and what kind of return investors should realistically expect.
A big shift is happening, not in revenue management, marketing, or operations, but in distribution. And not distribution as we’ve historically understood it, but Agentic Hotel Distribution backed by AI-native distribution systems that don’t just analyze performance but actively decide and execute in real time.
This is the moment when distribution stops being a cost center or a technology line item and starts behaving like something far more important: a foundational shift where AI isn’t just a tool but an infrastructure. When AI is embedded natively into how a hotel sells itself, distribution becomes a revenue multiplier, not a tech expense.
The mistake I see most often (especially in investor conversations) is treating AI like software rather than infrastructure. When AI is bolted onto legacy systems, it produces incremental efficiency at best. When it is built into the core of distribution, it changes the economics of demand creation and capture altogether.
Traditional hotel distribution is channel centric. We’ve organized the business around OTAs, brand.com, GDS, and wholesale, each managed separately, optimized with rules, and measured largely by cost of acquisition. That model assumes humans make decisions and systems simply execute them.
Agentic distribution reverses that assumption.
In an AI-native environment, autonomous agents continuously evaluate demand signals, traveler intent, price elasticity, channel performance, and competitive context. They don’t wait for weekly revenue meetings or static rules to change. They decide where to sell, to whom, at what price, with what message, and through which interface—and they act instantly.
This isn’t theoretical. It’s already emerging across the industry. By 2026, hotels without agentic distribution capabilities will be structurally disadvantaged, regardless of brand or location. They will be slower to respond to demand, noisier in the marketplace, and more expensive to transact with. That disadvantage shows up directly in margins.
What this means for investors
This is where the conversation fundamentally changes. Distribution performance is no longer just an operational issue delegated to management teams. It’s becoming an intrinsic characteristic of the asset itself.
Historically, two identical hotels in the same market could perform very differently based on operator quality. Going forward, that performance gap will increasingly be driven by distribution intelligence. AI-native distribution directly affects net RevPAR, not just topline RevPAR. It influences how quickly demand is captured, how stable margins remain during volatility, and how resilient an asset is when brand or channel dynamics shift.
In other words, distribution architecture now impacts cash flow predictability. And cash flow predictability is what ultimately drives valuation and exit multiples.
Hotels equipped with agentic distribution behave differently in both up and down cycles. They recover faster, protect margin better, and compound gains more efficiently. That makes distribution capability comparable to location, physical condition, and brand strength when underwriting deals. It is no longer just a systems decision; it’s an asset-class decision.
Where AI investment dollars should go
The priority for investment dollars should be platforms that are designed to decide and act autonomously, not tools that simply surface insights. AI-native distribution platforms built from the ground up (rather than legacy CRS or RMS systems retrofitted with AI features) are fundamentally different. They learn continuously and optimize holistically across channels instead of operating in silos.
Equally important is AI that creates demand, not just reallocates it. Agentic systems that identify high-intent travelers earlier in the journey and engage them conversationally generate incremental revenue, not just improved conversion. That distinction matters enormously for investors focused on growth, not just efficiency.
Real-time channel orchestration is another critical capability. When inventory, pricing, and messaging shift dynamically based on marginal profitability rather than fixed rules, NOI improvements follow quickly. Underpinning all of this, is data liquidity is the ability for AI agents to access unified, real-time guest and performance data without friction.
Where NOT to spend
AI that functions as dashboard decoration—telling you what happened yesterday without the ability to act today—does not move revenue. Point solutions that can’t execute, transact, or deploy decisions remain productivity tools, not revenue engines. And legacy systems wearing AI branding often carry more technical debt than strategic advantage.
Investors should also be cautious about brand-mandated technology that limits optionality. Uniformity can be useful, but optionality is increasingly valuable in an AI-driven distribution landscape.
The underlying mental model must shift. AI-native distribution is not about cutting costs or reducing headcount. It’s about expanding decision capacity and making better decisions faster, at scale, across every demand moment. That’s why it belongs in growth CapEX, not “IT OpEx.”
As you talk about interest rates, transaction volume, and development pipelines, there’s a quieter truth sitting beneath all of it. The next major performance gap in hotels won’t come from real estate alone. It will come from intelligence.
By 2026, the question won’t be whether a hotel “uses AI.” Rather, the question will be whether the asset knows how to sell itself.
In a world of autonomous buyers, the assets with autonomous sellers will trade at a premium because they don’t just participate in demand. They compound it.
