According to Phocuswright's report *U.S. Hotel & Lodging Travel Market Essentials 2026*, U.S. hotel room revenue rose 1% to $207.9 billion in 2025, with average daily rates up just 1% and occupancy falling to 62.3%. For 2026, room revenue is projected to increase 3% to $214.7 billion. Hotels now account for 41% of U.S. travel gross bookings, behind airlines at 42%. The fastest-growing segment is online, up 4% in 2025 against a flat offline channel. Within online, the split between OTAs and hotel websites and apps sits at 52%/48% and is expected to hold steady through 2029. OTAs are projected to outpace every other channel in 2026 and 2027. Artificial intelligence is a top priority across hotel operations, with marketing, customer service, revenue management and operations in active transformation. AI platforms are currently operating at the top of the funnel, functioning largely as a replacement for traditional search. Expedia and Kayak have booking plug-ins integrated into ChatGPT.