Independent hospitality, from boutique hotels and bed-and-breakfasts to vacation rentals, inns and even glamping sites, is entering a new chapter. Long reliant on spreadsheets and word-of-mouth recommendations, these properties are now leaning on artificial intelligence (AI) to streamline operations, sharpen pricing and keep their personal touch while staying competitive in a crowded market.
According to new research from TakeUp, a hospitality technology company that builds AI-powered tools for independent hotels and operators, property owners and managers who are currently using AI in their operations report that they are not just experimenting but leaning into it as a competitive advantage.
Nearly 70 percent say that AI adoption is important for staying competitive, with 39 percent calling it a significant edge over competitors and 30 percent saying it's essential for survival. What was once the exclusive territory of big chains with deep pockets is quickly becoming a minimum requirement for the bed-and-breakfast, boutique hotel or glamping site down the road.
"[It's] a perfect storm of accessibility and urgency," Bobby Marhamat, CEO of TakeUp, told Newsweek. "With the amount of investment and innovation around AI tools, the technology today has democratized the technology landscape. No longer are AI tools just available to the large organizations that could afford the technology. Today, AI tools are built for real operators. These tools are affordable, plug-and-play, and designed for humans, not engineers.
"And independents have a superpower that big brands don't: agility. They're not handcuffed to legacy tech stacks or corporate red tape. They can move. They can test. They can adopt what works and ditch what doesn't fast."
Why AI, Why Now
The survey results paint a clear picture: efficiency is the spark, competitiveness is the fuel. Time savings and efficiency were the top reasons for adoption, followed by cost reduction and competitor advantage. For many, the appeal is immediate: automating guest communications, pricing decisions and routine tasks that once soaked up staff time.
Guest communication and chatbots are the top use of AI, followed by marketing and advertising and social media management. That makes sense, Marhamat said, because the guest experience is the heart of independent hospitality.
"For independent operators, the guest experience is everything. It's their brand. It's their reputation. It's the reason travelers choose them over the big chains," Marhamat said. "So when AI can step in and make that experience faster, friendlier, and more personal, without sacrificing the human touch, it's a game changer."
Owners are also turning to AI for marketing optimization, dynamic pricing and energy management. In each case, the motivation is the same: simplify the complex, amplify what makes the property unique and stay one step ahead of competitors.
The Saratoga Arms Test Case
At Saratoga Arms, a 30-room boutique hotel in upstate New York, the transformation has been tangible. Before AI, General Manager Rachel Paley said she was manually adjusting rates every single day, spending an average of 15 hours a week on it.
"I knew pricing was important, but there was never enough time to test new strategies or analyze pace data in detail," Paley told Newsweek. "With AI, that changed overnight. The AI learned our property, tested price sensitivity, and delivered optimized automated rates daily, all while keeping me in control."
The result? Saratoga Arms started seeing guests book at price points they never thought possible, without sacrificing occupancy. This translated to an 11 percent year-over-year increase in revenue per available room, compared with just under 2 percent growth across the industry.
Meanwhile, the system saved Paley more than 10 hours a week, time that can be reinvested into guest service and staff training.
"The difference has been dramatic," Paley said. "What once took hours of manual data pulls and competitor checks now happens in minutes. I no longer debate rate strategy. The system provides precise recommendations grounded in demand and market data. We've seen improved accuracy in capturing higher-yield nights, and a measurable uplift in revenue compared to manual adjustments.
"Staff morale has improved because they no longer feel like they're 'flying blind' or under pressure to make quick, high-stakes pricing decisions without perfect data. The system reduces errors, but more importantly, it gives our team confidence. That confidence translates into less burnout and more energy for guest-facing interactions."
She added, "We view technology as a support, not a replacement for the human connection that's a critical part of a Saratoga Arms stay. Our hotel's identity is rooted in personal connections, storytelling, and thoughtful service. By automating tasks like pricing, reporting, or back-office processes, we free our team to focus on greeting guests by name, remembering their preferences and creating those small moments of delight that define a boutique stay. The technology works quietly in the background. Our guests still feel the charm of a historic hotel with the efficiency of a modern operation."
Barriers Still in the Way
For all the enthusiasm, challenges remain. Roughly one third of owners cite lack of technical expertise or staff training as their biggest hurdles. Others struggle with integration into existing systems or fear losing the personal touch that defines boutique hospitality.
"First and foremost, start small," Marhamat said. "You don't need to automate everything at once. Begin with one high-impact area, like guest messaging or pricing, where the ROI is fast and visible. Let that early win build confidence across the team. And look for partners who offer not just software, but real support: onboarding, walkthroughs, even strategy guidance. You're not just buying a tool, you're building a relationship."
Cost is another sticking point. Owners say lower upfront and subscription costs, paired with stronger staff training and clearer ROI, would accelerate adoption.
Data privacy remains a concern as well, with 15 percent citing it as their top worry. For independents who trade on trust and intimacy, protecting guest data isn't just compliance, it's brand preservation.
The Human Touch Stays Central
"In my mind, authentic hospitality isn't about doing everything manually; it's about being present when it matters most," Marhamat said. "If AI can handle the background noise, check-in logistics, late-night 'what's the WiFi?' messages, and routine follow-ups, then the staff can lean into real conversations, personalized recommendations and thoughtful service."
Paley agreed, noting: "We're exploring automated pre-arrival communications based on personal preferences that highlight local events, dining options and experiences tailored to a guest's interests. We see potential in AI-driven concierge support for simple questions—directions, parking info, restaurant hours—freeing our concierge to focus on higher-touch, personalized requests. We're also looking at guest preference tracking. We'd love to use AI to build richer guest profiles so returning guests feel immediately recognized and valued."
It's a reminder that while AI may handle the mechanics, the essence of hospitality remains human. Guests don't return for an algorithm, they return for the feeling of being known.
What's Next
Looking ahead, operators plan to expand AI use across operations. Smart energy management leads the way, followed by guest communication automation, automated marketing campaigns and dynamic pricing tools.
Marhamat believes AI-powered marketing is the biggest near-term growth driver.
"With the right tools, operators can optimize spend across every channel—[online travel agencies] OTAs, paid search, social, email—by tracking performance in real time and shifting budget toward what's actually working. No more guessing. No more wasted dollars," he said.
That reinvestment cycle is where independents could truly outpace the chains. With AI taking care of analytics and automation, operators are freed to focus on what guests remember: upgraded amenities, curated experiences and genuine human connection.
"For decades, big brands had the upper hand: bigger budgets, more data and entire teams for pricing, marketing and operations. But AI is changing that fast," Marhamat said. "We believe AI is going to level the playing field and then tilt it in favor of independents."
Independent hospitality has always thrived on creativity and intimacy. Now, with AI, it has the chance to turn those traits into a lasting competitive edge. The numbers suggest it's already happening, but only for those willing to lean in.
"My advice is simple: Get in the game now," Marhamat said. "This is not something to watch from the sidelines. AI is already reshaping how guests search, book and experience travel. And the sooner you start, the more advantage you'll have."
