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The Mille Club: Potato Chip Pricing Lessons

For those who have not followed our writing, the Mille Club refers to properties with rates over one thousand dollars, pounds or euros, with the ‘mille’ picked up from the Italian language. The Mille Club’s premise is that guests at this level are looking for an incredible experience rather than mere accommodations. Instead, hoteliers’ offerings compete for guests independent of location, making comp sets typically geographically derived moot. With great rate comes great expectations…
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U.S. tourism downturn deepens

🛬 Feb 23, 2026: The U.S. experienced a 6% drop in foreign visitors last year, with a further 4.8% decline in January. New visa fees and stricter border policies are contributing factors. Canadian visitor numbers fell 28%, affecting states like Florida. An estimated 11 million fewer visitors caused substantial economic loss. Summer bookings from Europe show double-digit declines. While events like the FIFA World Cup might help, long-term recovery is uncertain due to political and pricing issues.
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ChatGPT begins showing ads in first responses

💰 Feb 23, 2026, in the U.S., ChatGPT starts showing sponsored ads in its first response to user prompts about travel. These ads, marked with “Sponsored” tags and brand icons, appear on high-intent queries like booking trips, marking AI platforms as new advertising battlegrounds. Initially, ads target major hotel groups due to high budget barriers. Independent hotels should monitor AI's impact on booking behaviors for potential future visibility.
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Expedia flags agentic AI as a competitive turning point

🛫 Feb 23, 2026, Expedia highlights AI as a competitive risk in its filing. Generative and agentic AI could transform travel booking, affecting consumer behavior and competition. Expedia invests in AI to maintain visibility and strengthen operations. New AI-native competitors may emerge, and platform visibility becomes crucial. AI scraping threatens proprietary data, while liability concerns arise. Internal AI boosts property onboarding and advertising, but consumer-facing AI tools are still developing.
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Hotels expand residential offerings to compete with Airbnb

🏠 Feb 23, 2026: Global hotel brands like Marriott and Hilton are strategically entering the residential-style accommodation market to compete with platforms like Airbnb. Increasing demand for multigenerational travel and extended stays is driving the shift. These brands offer apartment-like products combining home comforts with hotel services. Hotels aim to capture Airbnb's market by providing similar flexibility with reliable services. Airbnb faces pressure as quarterly profits decline amidst intensifying competition.
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Airbnb plans AI-native overhaul of search and support

💻 Airbnb, on February 23, 2026, is embedding large language models into its app to enhance personalization and automate services. Currently, AI-powered customer support resolves 33% of inquiries in North America, with plans for voice-based service and multilingual capabilities. The company is testing conversational search and aims for 80% AI tool usage among engineers. Airbnb's strategic shift aims to refine guest discovery and host management, potentially including future sponsored listings.
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Low-cost AI integration opens new distribution path for Wyndham

💻 Feb 23, 2026, Wyndham Hotels & Resorts reveals it integrated with AI platforms like Google AI, ChatGPT, and Anthropic for under $100,000, avoiding transaction fees by directing bookings to brand.com. This cost-effective AI-driven strategy could transform hotel distribution, bypassing traditional commission models. However, future monetization of AI platforms remains uncertain. Wyndham's strategic move aims at increasing direct bookings through conversational AI, signaling a shift in digital distribution approaches.
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