The hospitality sector has witnessed significant disruptions over the past two decades. Apps like Airbnb revolutionised travel by offering unique stays in homes and apartments, attracting guests seeking more personalised experiences. However, Airbnb’s lack of consistency in service quality left a gap for traditional hotel chains, which continue to offer predictable, brand-standardised experiences. Meanwhile, brands […]
The hospitality sector has witnessed significant disruptions over the past two decades. Apps like Airbnb revolutionised travel by offering unique stays in homes and apartments, attracting guests seeking more personalised experiences.
However, Airbnb’s lack of consistency in service quality left a gap for traditional hotel chains, which continue to offer predictable, brand-standardised experiences.
Meanwhile, brands like Marriott and Hilton have doubled down on loyalty programmes to retain customers, but their one-size-fits-all approach doesn’t always meet evolving guest preferences.
Now, Otonomus — billed as the world’s first AI-powered hotel — plans to bridge that gap.
At this year’s CES in Las Vegas, Steve Escalante, VP of business development at Growth Holding [the group that owns Otonomus], told TechInformed: “Hospitality has historically been one of the slowest industries in technological evolution. It’s been delivered the same way for the last 100 years. And we wondered, why can’t we push the envelope?”
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While Airbnb has made strides in AI, including acquiring GamePlanner.AI in 2023 and implementing AI for personalised recommendations and dynamic pricing, CEO Brian Chesky recently stated it is “still too early for AI trip planning.”
This approach juxtaposes Otonomus’ bold strategy of forging ahead with AI adoption, where other major players remain hesitant.
By combining the personalised, home-like feel of Airbnb with the reliability and amenities of high-end hotels, Otonomus hopes to introduce a model that could redefine Hospitality.
Escalante likens the approach to trends seen in sectors like retail and transportation, where AI and data-driven personalisation have become crucial for staying competitive.
“In other industries, the Ubers and DoorDash’s of the world have used technology to save time and efficiency in a way that the consumer has really adopted,” added Escalante.
Otonomus stall at CES 2025 in Las Vegas
Can AI in Hospitality solve the industry’s biggest challenges?
According to Escalante, the hotel represents a hybrid model that merges short-term residential experiences with luxury hotel services. The cornerstone of this innovation lies in AI-driven personalisation.
Unlike hotel loyalty programmes that place guests in generic tiers such as silver, gold, or platinum, Otonomus uses AI to build a unique digital avatar for each guest. This avatar continuously learns from guest behaviour, from preferred lighting and temperature to coffee choices and spa visits.
“The technology doesn’t get tired. It doesn’t make mistakes. If you want your coffee a certain way today, it’ll remember it for tomorrow,” Escalante said. “It’s like having a butler in the palm of your hand.”
This level of individualisation is enabled by two integrated systems: The KEE and Firo.
The KEE is a user-facing app that acts as a personal assistant, handling requests such as additional towels or room service. Firo, meanwhile, operates behind the scenes, managing property logistics, housekeeping schedules, and guest services.
At the core of these systems is O Brain, the central AI engine that correlates millions of data points to predict guest preferences and behaviours.
O Brain’s deep learning capabilities allow it to anticipate what guests will want during their stay and how much they will likely spend. This predictive approach enables Otonomus to offer tailored promotions, enhancing guest satisfaction while driving revenue.
“Let’s say you travel to a specific hotel 15 times a year. They’re going to get to know you, sure. But what if you only go once a year? They’re probably not going to remember you. With our system, it doesn’t matter if you come one time a year or 15. You’re going to feel like a VIP regardless.”
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A flexible asset for investors
Otonomus isn’t just disrupting Hospitality; it’s also redefining hotel real estate. The building’s design allows it to pivot between hotel operations and residential use. Should demand for travel plummet — as it did during the COVID-19 pandemic — the property can quickly convert into multi-family housing.
This flexibility offers investors a safety net, reducing financial risk and broadening the asset’s potential use cases.
“The asset itself has flexibility based on the highest and best use,” Escalante explained. “We’re disrupting two industries — hospitality and real estate — by creating a building that can adapt to market needs.”
Otonomus’ AI capabilities extend beyond guest experience to operational efficiencies. Traditional hotels require large teams to manage check-ins, guest requests, and daily maintenance. By automating these processes, Otonomus significantly reduces labour costs.
Human employees remain part of the equation but are redeployed to guest-facing roles focused on enhancing the customer experience.
“Our AI-powered systems allow us to deliver a seven-star experience at the cost of an Airbnb stay,” said Escalante. “That’s very disruptive.”
AI’s predictive analytics also boost revenue generation. For instance, if the system forecasts rain during a guest’s stay, it can proactively suggest spa treatments or indoor activities, ensuring that guests continue spending within the hotel.
Otonomus AI Hotel in Las Vegas. Image: AHC Capital Holdings / Otonomus-Hotel
What are the concerns?
The adoption of AI in the industry raises questions about potential ethical concerns, including how AI-driven decisions might affect employment in Hospitality and how extensive data collection could challenge guest privacy norms.
With such extensive data collection, privacy concerns are inevitable. Escalante emphasises that Otonomus places guest control at the forefront.
“We’ve adopted a philosophy where guests can opt in or out of data sharing. The data we collect is housed securely in the cloud and is used solely to deliver a better experience,” he assured.
He added: “The data that we’re creating in our environment is specific to our concept,” when asked if users should be concerned about their data being shared with third parties.
Other long-term implications could include a shift in industry standards where hyper-personalisation becomes expected, potentially sidelining smaller players who cannot invest in similar technologies and reducing the number of jobs available to humans.
“We still have people,” about 30 human employees, Escalante reassures, “but they’re going to be focused on the guests and not on making photocopies, running reports, or handling administrative tasks because that’s what the technology is built to do.”
“We really want to create an environment where the employees are happy and truly focused on catering to the guest experience,” he added.
In it for the long run
While the initial Otonomus hotel opens in Las Vegas, Escalante revealed that discussions with major hotel chains are already underway. The AI-powered model is highly scalable, with potential applications across existing hospitality brands and even in other sectors, such as residential buildings and retail.
“Consumers today are used to seamless, tech-enabled experiences. The timing is right, and scaling this concept will be straightforward,” Escalante stated.
However, scaling will not be without challenges. The industry’s adoption rate and regulatory considerations around AI and data privacy will be key factors in determining how quickly Otonomus can expand its footprint.
“Right now, we really want to perfect and refine not only the concept but the technology before deploying it at scale,” said Escalante.
Philippe Ziade, founder and CEO of Otonomus, envisions the brand becoming the world’s leading hotel chain within the next decade. His background in creating AI-powered luxury homes at LIVV Homes laid the groundwork for this ambition.
If Otonomus succeeds, it could redefine what guests expect from hotels, forcing legacy brands to rethink their approaches to personalisation, operational efficiency, and guest engagement.
For now, all eyes will be on Las Vegas this summer, when the first hotel is set to open, to see whether the AI-powered hotel experience can deliver on its ambitious promise.
