As hotel owners contend with slowing revenue growth, rising labor costs and persistent inflation, profitability has become the industry’s defining challenge.
During the latest episode of HOTELS’ Magazine Webinar Series, “System Fix: Plugging Hidden Profit Leaks in Hotel Operations”, which you can watch in full below, executives from Remington Hospitality, Keytel and Hotel Sync discussed how operators can uncover hidden profit leaks and use technology—including AI—to improve margins.
Moderated by HOTELS’ editor-in-chief David Eisen, the discussion examined where hotels are losing money, how technology should be evaluated and why AI is becoming less of a buzzword and more of an operational necessity. You can watch the webinar
Profitability requires more than growing revenue
Adrian de Gortari, EVP of Revenue Strategy at Remington Hospitality, said improving profitability requires hotels to simultaneously maximize revenue while controlling expenses.
“It’s about growing ADR through the right customer segments and the most profitable channels while finding incremental revenue streams and staying disciplined on expenses,” he said.
Technology, he added, helps operators make faster and more informed decisions through predictive analytics, allowing teams to anticipate demand shifts and identify cost pressures before they affect the bottom line.
Djordje Jevtic, co-founder and CEO of Hotel Sync, cautioned that simply purchasing more technology does not automatically increase profitability.
“Bad technology can become another cost center,” he said.
Instead, he argued that hotels should prioritize three areas:
- Automating repetitive operational tasks.
- Improving commercial decision-making by measuring net profitability—not just room rates.
- Increasing revenue per guest through upselling and cross-selling opportunities such as room upgrades, parking, spa services, breakfast and late checkout.
Looking beyond RevPAR
The panel agreed that RevPAR remains an important benchmark but no longer tells the full profitability story.
De Gortari said Remington increasingly focuses on metrics such as GOP, GOPPAR, EBITDA and NOI, along with net revenue after acquisition costs. “RevPAR gives a clean picture of industry performance,” he said. “But owners ultimately care about EBITDA and NOI because that’s where valuations and financing are tied.”He also noted that hotel management agreements are gradually evolving to include profitability-based performance incentives rather than relying solely on top-line revenue metrics.
Hidden profit leaks remain widespread
The conversation then shifted to operational inefficiencies that quietly erode hotel profits.
Xavier Cortés, managing director at Keytel, said many hotels have accumulated fragmented technology stacks over time. Properties often operate separate property management systems, channel managers, CRMs and revenue management platforms that do not integrate effectively, creating inefficiencies and unnecessary labor. He also highlighted distribution costs as one of the industry’s largest hidden expenses.
Many hotels, he said, still struggle to accurately calculate the true net revenue generated by each distribution channel after commissions, payment processing fees, virtual credit card charges and foreign exchange costs. Jevtic agreed, adding that many hotels now suffer from having too many disconnected systems rather than too little technology. “Our job is reducing complexity,” he said. “The value is better control over revenue, costs, distribution, payments and operations.”
Distribution strategy is becoming more sophisticated
The panelists also discussed customer acquisition costs and the evolving role of online travel agencies. Rather than viewing OTAs as competitors, Jevtic described them as “expensive demand engines” that should be used strategically.
Hotels should understand the true acquisition cost of every booking channel while investing in direct bookings, CRM capabilities and guest retention.
De Gortari agreed that OTAs have become essential marketplace partners. “The opportunity is engaging that guest and ultimately converting them into a direct customer,” he said. Cortés added that while OTAs have dramatically expanded hotel visibility worldwide, operators now have better technology to build stronger direct booking channels and achieve a healthier balance between third-party distribution and direct business.
AI is shifting from hype to practical applications
Although artificial intelligence dominated much of the discussion’s second half, the speakers emphasized practical implementation over futuristic predictions.
Jevtic said AI delivers the greatest value by automating repetitive tasks. At Hotel Sync, AI is already responding to guest messages across multiple booking platforms, answering common questions, supporting multiple languages and recommending additional services before arrival. “Hospitality is human-centric,” he said. “AI won’t replace hospitality, but it will automate the back office workload.”
De Gortari said Remington has integrated AI into proprietary business intelligence platforms to support forecasting, competitor analysis, revenue optimization, cost-of-acquisition modeling and risk assessment.
He believes many hospitality companies are still discussing AI rather than deploying it. “Everyone’s talking about AI,” he said. “Not many people are actually utilizing it.”
Cortés added that AI will continue transforming revenue management, conversational search and hotel distribution, although he believes the industry remains in the early stages of adoption.
A vision for fully integrated hotel operations
Asked what single initiative could most improve hotel profitability over the next year, all three speakers envisioned more integrated technology ecosystems.
De Gortari called for a unified platform that combines property management, revenue management, booking, ancillary revenue and business intelligence into a single live operational dashboard.
Cortés agreed, suggesting the industry’s future lies in comprehensive, connected platforms capable of delivering seamless hotel operations.
Jevtic looked even further ahead, envisioning AI agents that automate nearly all back-office functions while managers oversee operations through centralized dashboards. “The final goal is a hotel without the back office,” he said. “You have AI handling operations while management focuses on making decisions.”
Throughout the discussion, one message remained consistent: improving profitability is no longer about simply increasing occupancy or room rates. Success increasingly depends on eliminating operational inefficiencies, understanding the true cost of every booking and deploying technology that helps hotels make faster, smarter decisions across the business.