More than half of hotels are using or procuring generative artificial intelligence, but fewer than one in 10 report that the technology has reduced manual work by more than 30 percent, according to the newly released State of Distribution 2026 report from NYU School of Professional Studies' Jonathan M. Tisch Center of Hospitality, RateGain and HEDNA.
The third annual report analyzed data from more than 270 hotel brands and more than 58,000 properties across 141 cities and 53 countries, offering a snapshot of how hotel commercial teams are approaching technology investment, AI adoption, distribution strategy and changing traveler behavior.
According to the report, AI adoption has accelerated rapidly across the hospitality industry, but measurable business impact has lagged. Most hotels report incremental gains rather than transformational changes in the way their teams operate.
The findings suggest that concerns around trust, governance and data privacy continue to limit AI's role in decision-making. Hotels are increasingly comfortable using AI as an assistant, but remain hesitant to allow the technology to act autonomously. As a result, many organizations are focusing technology investments on improving existing systems rather than expanding their technology stacks.
Among the report's key findings:
- Commercial teams across marketing, sales, distribution and revenue management are collaborating more closely, though fragmented systems and disconnected data remain significant challenges.
- More than 80 percent of commercial teams spend one to two days each week manually producing and analyzing reports, while fewer than 30 percent have invested in dedicated reporting tools.
- More than half of hotels use or are procuring generative AI, but fewer than one in 10 report manual-work reductions above 30 percent.
- Technology budgets continue to rise, with hotels prioritizing system optimization, productivity improvements and reduced vendor complexity over platform expansion.
- Although direct-booking technology is nearly universal, online travel agencies generate nearly twice as many bookings as hotel-owned digital channels.
- AI-generated search traffic is contributing a measurable share of reservations, yet 55 percent of hotels report little or no change to their distribution strategies.
The report also identified midscale hotel chains as a potential commercial sweet spot. These organizations appear large enough to invest in technology and specialized expertise while remaining agile enough to avoid some of the integration and organizational challenges facing larger chains.
"Buying AI is easy. Getting value from it is not, and this report shows most of the industry is still stuck between the two," Bhanu Chopra, founder and managing director of RateGain, said in a statement. "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. That shift has not happened yet, and it is the single biggest opportunity in front of the industry."
"This third edition reflects how quickly hotel commercial operations are evolving," said Vanja Bogicevic, clinical associate professor and director of HI Hub Exchange at the NYU SPS Jonathan M. Tisch Center of Hospitality. "AI is reshaping how travelers discover hotels, how commercial teams work, and how pricing and demand decisions are made. This year, we expanded the research to examine these emerging realities, including zero-click search, AI governance, behavioral pricing, data privacy and regulatory oversight."
"Unbiased data beats hype," HEDNA President Lisa Murphy said. "Three years of this research show that commercial teams are becoming more connected and technology investment is growing, yet fragmented systems and manual work remain deeply embedded."
The survey examined hotel commercial operations from Dec. 1, 2024, through Nov. 30, 2025, with respondents representing revenue management, marketing, distribution and sales functions. The analysis compared independent hotels, midsized hotel chains and large hotel brands to evaluate differences in technology adoption, operating models and commercial priorities.
First launched in 2024, the State of Distribution report has expanded to include research on generative AI, governance, booking attribution, traveler intent, behavioral pricing, data privacy and regulatory compliance, while maintaining benchmarks that allow year-over-year comparisons. The 2026 report was unveiled during HEDNA Lisbon.