Wyndham Pitches AI as Antidote to Hotel Margin Pinch

Wyndham raised its full-year outlook for revenue per available room on Thursday, as executives discussed the potential of AI to boost profitability for hotel franchisees. The context was that many owners of its budget and mid-market hotels face a slow grind toward recovering past margin levels.

Why it matters: Room rate pricing power is not keeping up with inflation fast enough to keep franchisees as profitable as they want. 

CEO Geoff Ballotti said that AI-based tools for boosting ancillary revenue and cutting costs are “really offsetting the rising labor costs and the rising brand fee costs and the rising distribution costs that obviously the whole industry always talks about. I mean, it’s a massive, massive offset for them.”