A new global report by Rackspace Technology, The AI Acceleration Gap: Why Some Enterprises are Surging Ahead, reveals both momentum and hesitation in hospitality’s AI journey. While 75% of travel and hospitality businesses now see AI as a strategic business driver rather than just an automation tool, the industry remains split between early adopters and those still on the sidelines.
Key Findings from the Hospitality Sector:
- Trust Issues Remain:
56% of hospitality respondents say AI accuracy needs “much improvement” before it can be fully trusted. And 63% believe human interpretation is still necessary when using AI tools, signaling that “human in the loop” models remain essential. - Emerging Leaders vs. Laggers:
Only 28% of hospitality/travel respondents qualify as “AI leaders” who have aligned strategy, compliance, training, and agent deployment. An equal percentage are still in the wait-and-see phase. - Current Use Cases:
Hospitality is leaning into AI for:- Customer service (51%)
- Productivity/knowledge management (44%)
- Product and app development (44%)
- Spending Trends:
Investment in AI is sharply rising:- 2025 spend jumped 250% over 2024, from $2.5M to $8.7M average across sectors.
- In hospitality, 42% of companies plan to invest $1M–$5M this year; 24% will spend over $5M.
- 78% expect to increase AI spend by 2030.
- What Success Looks Like:
ROI is not the primary KPI. Hospitality leaders rank customer service (47%), revenue/profitability (45%), and process efficiency/automation (42%) above ROI (30%) as key success measures for AI. - Barriers to Adoption:
Major obstacles include:- Organizational resistance to change (54%)
- Talent gaps (52%)
- Security risks (42%)
- Data quality concerns (43%)
- AI accuracy (42%)
- Responsible AI Top of Mind:
Regulatory compliance is a growing priority:- 53% cite tightening data privacy laws as a top challenge.
- 70% believe current guardrails are sufficient, though over half question the accuracy of AI outputs.
What This Means for Hospitality IT Leaders
Hotel IT leaders now find themselves at a strategic crossroads. The report underscores a growing divide: while some hospitality organizations are scaling AI with strong governance, workforce readiness, and robust infrastructure, others are held back by risk aversion and resource limitations.
The implications are clear:
- Start Small, Scale Smart: The most successful adopters didn’t wait for AI to be perfect—they began with low-risk, high-visibility use cases like customer service chatbots and operational task automation. These initial wins built internal momentum and executive buy-in.
- Talent and Trust Are Bottlenecks: A lack of internal AI expertise and mistrust in AI outputs remain major barriers. Upskilling staff and clearly defining the role of AI (as a co-pilot, not a replacement) could help mitigate fear and accelerate adoption.
- ROI Isn’t Everything—But Proof Matters: While the industry isn’t obsessed with immediate ROI, tech leaders still need to demonstrate how AI initiatives improve guest experience, reduce costs, or streamline back-of-house operations.
- Compliance Pressure Will Grow: As regulations tighten, hotel IT teams will need to prioritize AI governance frameworks, especially when handling guest data or deploying generative AI in marketing and service applications.
In short, the gap between AI leaders and laggards in hospitality is widening—and those who fail to build a thoughtful, scalable AI strategy today may struggle to compete tomorrow.
